Choice Hotels International Inc (CHH)

Quick ratio

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash US$ in thousands 26,754 36,432 36,167 31,679 41,566 52,541 607,185 527,209 511,605 415,116 307,975 222,961 234,779 191,967 314,139 321,954 33,766 31,569 34,407 31,810
Short-term investments US$ in thousands — -55,081 -44,946 -33,216 — — — — — 42,961 42,793 — 29,104 26,454 — — — — — —
Receivables US$ in thousands 230,945 282,250 278,150 271,932 273,839 350,517 260,773 234,008 220,111 269,333 272,271 197,831 118,731 205,453 187,885 182,995 141,566 171,802 181,452 153,969
Total current liabilities US$ in thousands 942,690 418,994 406,686 369,574 435,898 426,383 582,351 563,513 570,295 590,594 315,975 243,800 255,847 252,420 218,737 255,420 325,888 316,304 321,008 303,871
Quick ratio 0.27 0.63 0.66 0.73 0.72 0.95 1.49 1.35 1.28 1.23 1.97 1.73 1.50 1.68 2.30 1.98 0.54 0.64 0.67 0.61

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 varied over the period under consideration. The quick ratio measures the company's ability to meet its short-term obligations using its most liquid assets. A quick ratio higher than 1 indicates that the company has enough liquid assets to cover its short-term liabilities.

From the data provided, we observe that the quick ratio fluctuated between 0.27 and 2.30 during the period. The quick ratio was lowest at 0.27 on December 31, 2023, which suggests that the company may have had difficulties meeting its short-term obligations with its current liquid assets at that point in time.

On the other hand, the highest quick ratio of 2.30 was recorded on June 30, 2020, indicating that the company had a strong ability to cover its short-term liabilities with its liquid assets at that time.

Overall, the trend in the quick ratio for Choice Hotels International Inc shows some variability, with periods of both lower and higher liquidity levels. It is essential for the company to maintain a healthy balance between its liquid assets and short-term liabilities to ensure financial stability and operational flexibility.