Choice Hotels International Inc (CHH)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 44.70% | 49.93% | 56.07% | 40.20% |
| Operating profit margin | 29.26% | 24.29% | 34.14% | 40.11% | 15.77% |
| Pretax margin | 24.96% | 21.82% | 31.16% | 35.21% | 6.85% |
| Net profit margin | 18.91% | 16.74% | 23.69% | 27.02% | 9.74% |
Choice Hotels International Inc has shown a fluctuating trend in its profitability ratios over the years. The Gross Profit Margin increased significantly from 40.20% in 2020 to 100.00% in 2024, indicating the company's ability to generate more profit from its revenue after accounting for the cost of goods sold.
Similarly, the Operating Profit Margin also witnessed a strong improvement from 15.77% in 2020 to 29.26% in 2024, reflecting the company's operational efficiency and effectiveness in managing its operating expenses to generate profit.
The Pretax Margin, representing the company's profitability before taxes, has shown a fluctuating trend, with a peak of 35.21% in 2021 and a decline to 24.96% in 2024. This indicates variations in the company's ability to generate profit before tax expenses relative to its total revenue.
Lastly, the Net Profit Margin, which reflects the company's profitability after all expenses, has also fluctuated from 9.74% in 2020 to 18.91% in 2024. This indicates the company's ability to control its costs and generate profit for its shareholders after all expenses have been deducted.
Overall, while there have been fluctuations in profitability ratios, Choice Hotels International Inc has shown improvements in its overall profitability, as evidenced by the increase in Gross, Operating, Pretax, and Net Profit Margins over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.33% | 15.66% | 22.77% | 22.20% | 7.69% |
| Return on assets (ROA) | 11.84% | 10.79% | 15.80% | 14.96% | 4.75% |
| Return on total capital | — | 1,125.73% | -251.50% | -72.27% | — |
| Return on equity (ROE) | — | 726.18% | 214.76% | 108.68% | — |
Choice Hotels International Inc's profitability ratios have shown significant improvement over the years based on the provided data.
1. Operating return on assets (Operating ROA) has consistently increased from 7.69% in 2020 to 22.77% in 2022, showing efficient utilization of assets to generate operating income. Although there was a slight dip in 2023 to 15.66%, it rebounded to 18.33% in 2024.
2. Return on assets (ROA) also exhibited a similar trend, starting at 4.75% in 2020 and reaching 15.80% in 2022. Although there was a decrease to 10.79% in 2023, it rose again to 11.84% by the end of 2024.
3. Return on total capital experienced significant fluctuations, with negative returns in 2021 and 2022, indicating possible capital inefficiencies. However, substantial improvement was seen in 2023 with a return of 1,125.73%, and no data available for 2020 and 2024.
4. Return on equity (ROE) demonstrated remarkable growth, going from no data in 2020 to 726.18% in 2023. This suggests that the company has been successful in generating profits for its shareholders.
Overall, Choice Hotels International Inc's profitability ratios reflect a positive trend, showcasing the company's ability to generate returns for both its operations and shareholders, with some fluctuations indicating potential areas for further investigation and improvement.