Choice Hotels International Inc (CHH)

Return on total capital

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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 400,736 429,675 438,416 462,977 480,603 494,634 511,723 481,890 423,172 340,525 214,083 100,742 102,034 154,212 215,782 310,825 316,736 302,810 318,604 325,086
Long-term debt US$ in thousands 1,068,750 1,391,270 1,384,290 1,374,810 1,200,550 1,155,140 844,729 844,426 844,123 843,820 — — 1,058,740 1,058,310 1,232,140 1,208,940 844,102 875,843 784,280 804,730
Total stockholders’ equity US$ in thousands 35,598 72,413 54,691 47,008 154,660 284,511 416,725 314,645 265,882 212,146 104,933 19,235 -5,752 -21,404 -42,752 -43,854 -23,511 -56,735 -122,660 -185,477
Return on total capital 36.29% 29.36% 30.47% 32.56% 35.46% 34.36% 40.57% 41.58% 38.12% 32.25% 204.02% 523.74% 9.69% 14.87% 18.14% 26.68% 38.60% 36.97% 48.16% 52.50%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $400,736K ÷ ($1,068,750K + $35,598K)
= 36.29%

Choice Hotels International Inc's return on total capital has shown fluctuations over the recent quarters. The return on total capital ranged from 9.69% to 523.74% in the past five years, with significant peaks and troughs observed across different quarters.

The return on total capital was relatively stable between March 2020 and September 2022, ranging from 14.87% to 41.58%. However, there was a notable spike in the return on total capital in June 2021 and March 2021, reaching exceptionally high levels of 204.02% and 523.74%, respectively. This indicates that the company achieved extraordinary returns relative to its total capital in those specific quarters.

Overall, while there have been fluctuations in the return on total capital, the company has generally maintained healthy returns, with the average ranging around 30% to 40%. It is important to further analyze the financial performance and factors contributing to the significant fluctuations in order to assess the company's financial health and efficiency in utilizing its capital effectively.