Question: consolidated balance sheets usd in thousands jun...
|Consolidated Balance Sheets - USD ($) $ in Thousands||Jun. 30, 2018||Dec. 31, 2017|
|Cash and cash equivalents||$ 37,148||$ 235,336|
|Receivables (net of allowance for doubtful accounts of $14,087 and $12,221, respectively)||186,034||125,870|
|Income taxes receivable||50||0|
|Notes receivable, net of allowance||29,237||13,256|
|Other current assets||30,683||25,967|
|Total current assets||283,152||400,429|
|Property and equipment, at cost, net||112,567||83,374|
|Intangible assets, net||248,469||100,492|
|Notes receivable, net of allowances||78,921||80,136|
|Investments, employee benefit plans, at fair value||20,349||20,838|
|Investments in unconsolidated entities||133,478||134,226|
|Deferred income taxes||23,310||27,224|
|Accrued expenses and other current liabilities||73,940||84,315|
|Current portion of long-term debt||1,099||1,232|
|Liability for guest loyalty program||81,178||79,123|
|Total current liabilities||286,673||284,651|
|Long-term deferred revenue||103,754||98,459|
|Deferred compensation and retirement plan obligations||24,866||25,566|
|Income taxes payable||29,041||29,041|
|Deferred income taxes||0||39|
|Liability for guest loyalty program||48,592||48,701|
|Commitments and Contingencies|
|Common stock, $0.01 par value, 160,000,000 shares authorized; 95,065,638 shares issued at June 30, 2018 and December 31, 2017 and 56,633,606 and 56,679,968 shares outstanding at June 30, 2018 and December 31, 2017, respectively||951||951|
|Accumulated other comprehensive loss||(5,282)||(4,699)|
|Treasury stock (38,432,032 and 38,385,670 shares at June 30, 2018 and December 31, 2017, respectively), at cost||(1,112,376)||(1,064,573)|
|Total shareholders’ deficit||(203,952)||(258,601)|
|Total liabilities and shareholders’ deficit||$ 1,123,016||$ 995,191|
1. Does total assets equal total liabilities and shareholders' Ddficit? What are the amounts of each in 2018?
2. Look at the line items in shareholders' deficit. Which items are negative? How much is ”accumulated other comprehensive loss”? How much is the negative amount in treasury stock?
10. Now that you understand the basic facts of Choice Hotels, we will calculate balance sheet ratios. Most finance textbooks start with the current ratio and the quick ratio. These ratios were designed for manufacturing companies, not service companies like Choice Hotels. And they are important for companies starting out in business. For Choice Hotels, there is no inventory so the ratios will be the same: current ratio = current assets / current liabilities; quick ratio = (current assets minus inventory) / current liabilities. Please calculate the current ratio for both 2017 and 2018 balance sheets.
11. The debt to total assets ratio is defined many different ways. In one definition, debt includes only liabilities on which the company pays interest. For Choice hotels this will include long-term debt and current portion of long-term debt. Calculate the debt ratio for June 30, 2018 and December 31, 2017.
12. Before companies bought large amounts of their own stock for treasury stock, fnancial analysts would calculate the debt to equity ratio. Since the balance sheet of Choice Hotels shows negative equity, this ratio makes no sense. In recent years, analysts have looked at the total stock market value of the company. As of September 28, 2018 according to Yahoo Finance, Choice Hotels has a total stock value called market cap (capitalization) of $4.7 billion. The total equity on the financial statements as of June 30, 2018 was a negative $204 million. Calculate the debt to equity ratio using $4.7 billion for equity.
13. Another calculation that is important for manufacturing companies is working capital. Of course, Choice Hotels manufactures nothing. But this will be good to know. Working capital is current assets minus current liabilities. Calculate working capital for Choice for June 30, 2018 and December 31, 2017.
14. Choice has unusual liabilities. One is the liability for the guest loyalty program. What is that for?