Choice Hotels International Inc (CHH)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 2,530,530 | 2,394,800 | 2,102,180 | 1,931,820 | 1,587,330 |
| Total stockholders’ equity | US$ in thousands | -45,271 | 35,598 | 154,660 | 265,882 | -5,752 |
| Financial leverage ratio | — | 67.27 | 13.59 | 7.27 | — |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,530,530K ÷ $-45,271K
= —
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. Choice Hotels International Inc's financial leverage ratio has shown significant fluctuations over the past few years.
As of December 31, 2021, the financial leverage ratio was 7.27, indicating that the company had a moderate level of debt relative to its equity. This suggests that Choice Hotels International Inc utilized a reasonable amount of debt to support its business activities.
However, by December 31, 2022, the financial leverage ratio had significantly increased to 13.59, signaling a higher reliance on debt to fund operations. This substantial increase may suggest that the company took on additional debt, possibly to fuel expansion or investment initiatives.
The financial leverage ratio surged to 67.27 by December 31, 2023, highlighting a substantial spike in debt relative to equity. Such a sharp increase could signify a significant shift towards debt financing, potentially posing higher financial risk for Choice Hotels International Inc.
The absence of data for the financial leverage ratio in 2020 and 2024 makes it challenging to provide a complete trend analysis. However, based on the available data, it is evident that the company's financial leverage ratio has shown considerable volatility in recent years, indicating fluctuations in its debt utilization and potential changes in its capital structure.
Peer comparison
Dec 31, 2024