Choice Hotels International Inc (CHH)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	US$ in thousands	26,754	41,566	511,605	234,779	33,766
Short-term investments	US$ in thousands	—	—	—	29,104	—
Receivables	US$ in thousands	230,945	273,839	220,111	118,731	141,566
Total current liabilities	US$ in thousands	942,690	435,898	570,295	255,847	325,888
Quick ratio		0.27	0.72	1.28	1.50	0.54

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($26,754K + $—K + $230,945K) ÷ $942,690K
= 0.27

The quick ratio of Choice Hotels International Inc has exhibited fluctuations over the past five years. The quick ratio decreased significantly from 1.50 in 2020 to 0.54 in 2019, indicating a potential liquidity strain in 2019. However, the ratio improved to 1.28 in 2021, suggesting an enhanced ability to meet short-term obligations. The quick ratio further increased to 0.72 in 2022 but decreased notably to 0.27 by the end of 2023, signifying a decline in the company's ability to cover its current liabilities with its most liquid assets. This marked reduction in the quick ratio in 2023 may raise concerns about Choice Hotels' short-term liquidity position and ability to meet its obligations efficiently.