What is Choice Hotels International Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Choice Hotels International's Probability of Financial Distress (%) is 0.05%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Choice Hotels International's Probability of Financial Distress (%)
For the Lodging subindustry, Choice Hotels International's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Choice Hotels International's Probability of Financial Distress (%) Distribution in the Travel & Leisure Industry
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's Probability of Financial Distress (%) falls into.
Choice Hotels International Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -7.56 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.05% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Choice Hotels International (Choice Hotels International) Business Description
Traded in Other Exchanges
Address
1 Choice Hotels Circle, Suite 400, Rockville, MD, USA, 20850
As of Dec. 31, 2022, Choice Hotels operated 628,000 rooms across 13 brands addressing the economy and midscale segments. Comfort Inn and Comfort Suites are the largest brands (27% of the company's total domestic rooms), while Ascend and Cambria (7% of total domestic rooms) are newer lifestyle and select-service brands. Choice added its 13th brand with the launch of extended-stay brand Everhome in January 2020. Choice closed on its Radisson acquisition in August 2022, which will add around 70,000 rooms. Franchises are 99% of total revenue, and the United States represents 79% of total rooms in 2022.
Executives
| Dominic Dragisich |
officer: Chief Financial Officer |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Noha Abdalla |
officer: Chief Marketing Officer |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| William L Jews |
director |
C/O FORTRESS INTERNATIONAL GROUP, INC., 7226 LEE DEFOREST DRIVE, SUITE 203, COLUMBIA, MD 21046 |
| Scott E Oaksmith |
officer: Controller |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Patrick Cimerola |
officer: Senior Vice President |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Simone Wu |
officer: Senior Vice President |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Brian Bainum |
director |
8171 MAPLE LAWN BLVD, SUITE 375, FULTON MD 20759 |
| John P Tague |
director |
|
| David A Pepper |
officer: SVP, Franchise Development |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| John Bonds |
officer: Senior Vice President |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Sanchez Raul Ramirez |
officer: Chief Strat & Intl Op Officer |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Elizabeth A Redmond |
officer: Principal Accounting Officer |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Donna F Vieira |
director |
300 CONTINENTAL DRIVE, NEWARK DE 19713 |
| Patrick Pacious |
officer: Senior Vice President |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
| Liza Landsman |
director |
1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850 |
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