Choice Hotels International Inc (CHH)

Debt-to-capital ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Long-term debt US$ in thousands 1,068,750 1,200,550 844,123 1,058,740 844,102
Total stockholders’ equity US$ in thousands 35,598 154,660 265,882 -5,752 -23,511
Debt-to-capital ratio 0.97 0.89 0.76 1.01 1.03

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,068,750K ÷ ($1,068,750K + $35,598K)
= 0.97

Choice Hotels International Inc's debt-to-capital ratio has fluctuated over the past five years. The ratio stood at 0.97 as of December 31, 2023, indicating that 97% of the company's capital structure is financed through debt. This represents an increase from the previous year's ratio of 0.89.

In 2021, the ratio was 0.76, showing a lower level of debt relative to capital compared to the other years in the data set. However, in 2020 and 2019, the ratio was notably higher at 1.01 and 1.03 respectively, suggesting a higher reliance on debt financing during those years.

Overall, the fluctuation in Choice Hotels International Inc's debt-to-capital ratio over the years could indicate varying levels of financial risk and leverage in the company's capital structure. It is important for stakeholders to closely monitor this ratio to assess the company's ability to meet its debt obligations and manage its financial health effectively.