Choice Hotels International Inc (CHH)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.45 | 0.62 | 0.64 | 0.65 | 0.57 | 0.53 | 0.41 | 0.43 | 0.44 | 0.45 | 0.00 | 0.00 | 0.67 | 0.67 | 0.73 | 0.71 | 0.61 | 0.64 | 0.65 | 0.69 |
| Debt-to-capital ratio | 0.97 | 0.95 | 0.96 | 0.97 | 0.89 | 0.80 | 0.67 | 0.73 | 0.76 | 0.80 | 0.00 | 0.00 | 1.01 | 1.02 | 1.04 | 1.04 | 1.03 | 1.07 | 1.19 | 1.30 |
| Debt-to-equity ratio | 30.02 | 19.21 | 25.31 | 29.25 | 7.76 | 4.06 | 2.03 | 2.68 | 3.17 | 3.98 | 0.00 | 0.00 | — | — | — | — | — | — | — | — |
| 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 | — | — | — | — | — | — | — | — |
Choice Hotels International Inc's solvency ratios indicate the company's ability to meet its long-term obligations. The debt-to-assets ratio has been relatively stable, with a slight increase from 0.45 in December 2023 to 0.65 in March 2019. This suggests that the company has used a moderate amount of debt to finance its assets, with around 45% to 65% of its assets funded by debt over the period.
The debt-to-capital ratio shows a fluctuating trend, ranging from 0.67 to 1.04 during the same period. This ratio indicates that Choice Hotels has been heavily reliant on debt to fund its operations and growth, with debt representing approximately 67% to 104% of the company's total capital structure.
The debt-to-equity ratio displays significant variability, ranging from 2.03 to 30.02. This indicates that the company's capital structure has fluctuated, with debt being as high as 30 times the equity in some periods, reflecting a high degree of financial leverage.
The financial leverage ratio has also shown considerable variation, from 4.98 to 82.36. This suggests that the company has used leverage to magnify returns but also exposes it to higher financial risk.
In summary, Choice Hotels International Inc's solvency ratios indicate a mixed picture of its financial health, with varying levels of debt utilization and leverage over the analyzed period. The company should closely monitor and manage its debt levels to ensure financial stability and sustainable growth.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 6.28 | 7.38 | 8.52 | 9.98 | 10.97 | 11.33 | 11.14 | 10.39 | 9.07 | 7.25 | 4.46 | 2.04 | 2.08 | 3.13 | 4.41 | 6.62 | 6.77 | 6.59 | 7.05 | 7.10 |
Choice Hotels International Inc has displayed varying levels of interest coverage over the past few years, ranging from a low of 2.04 in March 2021 to a high of 11.33 in September 2022. The interest coverage ratio measures the company's ability to meet interest payments on its debt obligations using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to meet interest expenses.
The trend in Choice Hotels International Inc's interest coverage ratios shows improvement from 2020 to 2022, with ratios generally increasing over this period. This suggests a positive trend in the company's ability to cover its interest payments over time. The highest interest coverage ratio of 11.33 in September 2022 indicates a strong ability to meet interest obligations with operating earnings.
However, it is worth noting that the interest coverage ratio declined in the last quarter of 2022 and the first quarter of 2023, dropping to levels around 2 to 4. This decrease could raise concerns about the company's ability to cover interest expenses with its operating income during those particular periods.
In conclusion, while Choice Hotels International Inc generally demonstrated an improving trend in interest coverage ratios over the years, there were instances of fluctuations that investors and analysts should monitor closely to assess the company's financial health and debt repayment capacity.