The Cheesecake Factory (CAKE)

Inventory turnover

		Jan 31, 2025	Dec 31, 2024	Jan 31, 2024	Dec 31, 2023	Jan 31, 2023
Cost of revenue	US$ in thousands	806,021	1,661,610	2,031,400	1,605,720	2,022,880
Inventory	US$ in thousands	64,526	64,526	57,654	57,654	55,559
Inventory turnover		12.49	25.75	35.23	27.85	36.41

January 31, 2025 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $806,021K ÷ $64,526K
= 12.49

The inventory turnover ratio for The Cheesecake Factory shows a fluctuating trend over the period analyzed. In January 2023, the inventory turnover was 36.41, indicating that the company converted its inventory into sales 36.41 times that year. Subsequently, the ratio decreased to 27.85 by December 2023, reflecting a slowdown in the inventory turnover efficiency. However, this trend reversed in January 2024 as the inventory turnover improved to 35.23, suggesting better management of inventory levels.

By December 2024, the inventory turnover ratio decreased again to 25.75, signaling a slower rate of inventory turnover compared to earlier periods. The most significant decline in inventory turnover was observed in January 2025, with a ratio of 12.49. This sharp decrease may indicate potential issues such as excess inventory or challenges in selling products efficiently.

Overall, fluctuations in The Cheesecake Factory's inventory turnover ratio suggest varying levels of operational efficiency in managing inventory levels and converting them into sales during the period analyzed. Further analysis and comparison with industry benchmarks may provide insights into the company's inventory management practices.