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.