The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as a company's Total Current Assets excludes Total Inventories divides by its Total Current Liabilities. Choice Hotels International's quick ratio for the quarter that ended in Dec. 2023 was 0.31.
Choice Hotels International has a quick ratio of 0.31. It indicates that the company cannot currently fully pay back its current liabilities.
The historical rank and industry rank for Choice Hotels International's Quick Ratio or its related term are showing as below:
CHH'
s Quick Ratio Range Over the Past 10 Years
Min: 0.31 Med: 1.33 Max: 1.69
Current: 0.31
During the past 13 years, Choice Hotels International's highest Quick Ratio was 1.69. The lowest was 0.31. And the median was 1.33.
CHH's Quick Ratio is ranked worse than 90.3% of 835
companies
in the Travel & Leisure industry
Industry Median: 1.1
vs CHH: 0.31
Choice Hotels International Quick Ratio Historical Data
The historical data trend for Choice Hotels International's Quick Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Lodging subindustry, Choice Hotels International's Quick Ratio, along with its competitors' market caps and Quick Ratio 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 Quick Ratio Distribution
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Quick Ratio distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's Quick Ratio falls into.
Choice Hotels International Quick Ratio Calculation
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets.
Choice Hotels International's Quick Ratio for the fiscal year that ended in Dec. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Choice Hotels International (NYSE:CHH) Quick Ratio Explanation
The quick ratio is more conservative than the Current Ratio because it excludes inventories from current assets. The ratio derives its name presumably from the fact that assets such as cash and marketable securities are quick sources of cash. Inventories generally take time to be converted into cash, and if they have to be sold quickly, the company may have to accept a lower price than book value of these inventories. As a result, they are justifiably excluded from assets that are ready sources of immediate cash.
In general, low or decreasing quick ratios generally suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. On the other hand, a high or increasing quick ratio generally indicates that a company is experiencing solid top-line growth, quickly converting receivables into cash, and easily able to cover its financial obligations. Such companies often have faster inventory turnover and cash conversion cycles.
The higher the quick ratio, the better the company's liquidity position.
Choice Hotels International Quick Ratio Related Terms
Thank you for viewing the detailed overview of Choice Hotels International's Quick Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Choice Hotels International (Choice Hotels International) Business Description
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.
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