Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets
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
Goodwill	173,741	80,757
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
Other assets	49,029	67,715
Total assets	1,123,016	995,191
Current liabilities
Accounts payable	72,266	67,839
Accrued expenses and other current liabilities	73,940	84,315
Deferred revenue	58,190	52,142
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 debt	795,124	725,292
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
Other liabilities	38,918	42,043
Total liabilities	1,326,968	1,253,792
Commitments and Contingencies
SHAREHOLDERS' DEFICIT
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
Additional paid-in-capital	204,899	182,448
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)
Retained earnings	707,856	627,272
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?