What is Choice Hotels International Sloan Ratio %?
Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
As of Dec. 2023, Choice Hotels International has a Sloan Ratio of 9.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Choice Hotels International Sloan Ratio % Historical 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.
Competitive Comparison of Choice Hotels International's Sloan Ratio %
For the Lodging subindustry, Choice Hotels International's Sloan Ratio %, along with its competitors' market caps and Sloan 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's Sloan Ratio % Distribution in the Travel & Leisure Industry
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's Sloan Ratio % falls into.
Choice Hotels International Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Choice Hotels International's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 52.82 (Mar. 2023 ) + 84.71 (Jun. 2023 ) + 92.024 (Sep. 2023 ) + 28.953 (Dec. 2023 ) = $259 Mil.
Choice Hotels International's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 12.033 (Mar. 2023 ) + 113.706 (Jun. 2023 ) + 121.451 (Sep. 2023 ) + 49.364 (Dec. 2023 ) = $297 Mil.
Choice Hotels International's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -29.463 (Mar. 2023 ) + -29.687 (Jun. 2023 ) + -44.115 (Sep. 2023 ) + -162.361 (Dec. 2023 ) = $-266 Mil.
* 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) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, Choice Hotels International has a Sloan Ratio of 9.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Choice Hotels International Sloan Ratio % Related Terms
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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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