Choice Hotels International Inc (CHH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 79.35% | 82.76% | 82.13% | 73.93% | 82.19% |
| Operating profit margin | 24.29% | 34.14% | 40.11% | 15.72% | 28.57% |
| Pretax margin | 21.82% | 31.16% | 35.21% | 6.85% | 24.21% |
| Net profit margin | 16.74% | 23.69% | 27.02% | 9.74% | 19.99% |
Choice Hotels International Inc's profitability ratios have shown fluctuations over the past five years. The gross profit margin has ranged between 73.93% and 82.76%, with a slight dip in 2020 followed by a recovery in 2021. The operating profit margin has varied from 15.72% to 40.11%, indicating some volatility in operating efficiency. The pretax margin has also fluctuated significantly, ranging from 6.85% to 35.21%, with a notable increase in 2021 compared to the previous year.
In terms of net profit margin, Choice Hotels International Inc has demonstrated a similar pattern of fluctuation, with margins ranging from 9.74% to 27.02%. The company experienced a substantial increase in net profit margin in 2021 compared to the prior years, indicating improved profitability. Overall, despite some variability in profitability ratios, there are signs of improvement in recent years, particularly in 2021, which may suggest effective cost management and revenue generation strategies.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.66% | 22.77% | 22.20% | 7.66% | 22.97% |
| Return on assets (ROA) | 10.79% | 15.80% | 14.96% | 4.75% | 16.07% |
| Return on total capital | 36.29% | 35.46% | 38.12% | 9.69% | 38.60% |
| Return on equity (ROE) | 726.18% | 214.76% | 108.68% | — | — |
Choice Hotels International Inc has shown fluctuating profitability ratios over the past five years. The Operating return on assets (Operating ROA) has ranged from 7.66% in 2020 to a peak of 22.77% in 2022, indicating the company's ability to generate operating income relative to its total assets. The Return on assets (ROA) has followed a similar trend, with the lowest at 4.75% in 2020 and the highest at 15.80% in 2022. This ratio indicates the overall efficiency in generating profits from its assets.
The Return on total capital has been volatile, with 2021 seeing the highest return at 38.12% and 2020 the lowest at 9.69%. This ratio reflects the company's ability to generate profits from both debt and equity capital invested in the business. The Return on equity (ROE) has shown a significant increase over the years, reaching 726.18% in 2023, indicating the company's ability to generate a high return on shareholder equity.
Overall, Choice Hotels International Inc's profitability ratios demonstrate a mix of strong performance in certain years and lower profitability in others. It is important for investors and stakeholders to closely monitor these ratios to assess the company's financial health and performance over time.