ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Choice Hotels International's annualizedNet Income for the quarter that ended in Dec. 2023 was $116 Mil.
Choice Hotels International's average Total Assets over the quarter that ended in Dec. 2023 was $2,314 Mil. Therefore, Choice Hotels International's annualized ROA % for the quarter that ended in Dec. 2023 was 5.01%.
The historical rank and industry rank for Choice Hotels International's ROA % or its related term are showing as below:
CHH'
s ROA % Range Over the Past 10 Years
Min: 5.07 Med: 16.45 Max: 20.62
Current: 11.77
During the past 13 years, Choice Hotels International's highest ROA % was 20.62%. The lowest was 5.07%. And the median was 16.45%.
CHH's ROA % is ranked better than 88.82% of 832
companies
in the Travel & Leisure industry
Industry Median: 2.35
vs CHH: 11.77
Choice Hotels International ROA % Historical Data
The historical data trend for Choice Hotels International's ROA % 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 ROA %, along with its competitors' market caps and ROA % 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 ROA % Distribution
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's ROA % distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's ROA % falls into.
Choice Hotels International ROA % Calculation
Choice Hotels International's annualized ROA % 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Dec. 2023) net income data.
ROA % is displayed in the 30-year financial page.
Choice Hotels International (NYSE:CHH) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Dec. 2023) net income data. The Revenue data used here is four times the quarterly (Dec. 2023) revenue data.
* 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Choice Hotels International ROA % Related Terms
Thank you for viewing the detailed overview of Choice Hotels International's ROA % 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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