Choice Hotels International Inc (CHH)

Financial leverage ratio

		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
Total assets	US$ in thousands	2,394,800	2,232,240	2,150,320	2,106,220	2,102,180	2,188,980	2,076,840	1,972,030	1,931,820	1,865,930	1,728,790	1,584,140	1,587,330	1,570,150	1,686,040	1,703,950	1,386,670	1,374,260	1,214,280	1,173,820
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
Financial leverage ratio		67.27	30.83	39.32	44.81	13.59	7.69	4.98	6.27	7.27	8.80	16.48	82.36	—	—	—	—	—	—	—	—

December 31, 2023 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $2,394,800K ÷ $35,598K
= 67.27

Choice Hotels International Inc's financial leverage ratio has shown significant fluctuations over the past several quarters. The ratio has ranged from a low of 4.98% to a high of 82.36%, indicating varying levels of reliance on debt to finance its operations and investments.

The trend of the financial leverage ratio indicates a general increase between March 2021 and December 2022, reaching its highest point in December 2022. This suggests that the company took on more debt during this period, potentially to fund expansions or strategic initiatives.

However, the ratio dropped sharply in the subsequent quarters, reaching a low of 7.69% in September 2022. This decline could indicate a shift towards deleveraging or a reduction in the use of debt financing.

Subsequently, the ratio increased again in 2023 but remained below the peak levels seen in 2022. This suggests that the company may still be managing its debt levels while balancing the need for financial flexibility.

Overall, the fluctuating pattern of Choice Hotels International Inc's financial leverage ratio indicates changes in its capital structure and borrowing practices, which could impact its financial risk and stability.