Choice Hotels International Inc (CHH)
Interest coverage
Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 484,129 | 399,330 | 377,541 | 372,841 | 378,427 | 426,169 | 434,910 | 459,471 | 477,097 | 471,139 | 488,228 | 458,395 | 403,188 | 327,019 | 218,782 | 105,441 | 108,225 | 175,846 | 223,268 | 320,242 |
Interest expense (ttm) | US$ in thousands | 87,131 | 83,322 | 77,452 | 69,877 | 63,780 | 58,235 | 51,429 | 46,411 | 43,797 | 43,658 | 45,934 | 46,373 | 46,680 | 46,981 | 48,034 | 49,425 | 49,028 | 49,225 | 48,965 | 46,976 |
Interest coverage | 5.56 | 4.79 | 4.87 | 5.34 | 5.93 | 7.32 | 8.46 | 9.90 | 10.89 | 10.79 | 10.63 | 9.88 | 8.64 | 6.96 | 4.55 | 2.13 | 2.21 | 3.57 | 4.56 | 6.82 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $484,129K ÷ $87,131K
= 5.56
Choice Hotels International Inc's interest coverage ratio has shown a declining trend from March 2020 to September 2021, indicating potential difficulties in meeting interest obligations with earnings. The ratio improved significantly from September 2021 to December 2022, reaching its peak at 10.89. This implies the company had robust earnings to cover its interest expenses comfortably during this period. However, there was a gradual decline in the interest coverage ratio from March 2023 to December 2024, suggesting a potential increase in financial risk as earnings may have been insufficient to cover interest costs effectively. Overall, the interest coverage ratio fluctuated over the analyzed period, with both strengths and weaknesses in the company's ability to meet its interest obligations with operating income.
Peer comparison
Dec 31, 2024