The Cheesecake Factory (CAKE)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,605,720	1,548,330	1,944,610	1,527,720	1,650,970
Payables	US$ in thousands	63,152	66,638	54,086	58,432	61,946
Payables turnover		25.43	23.23	35.95	26.15	26.65

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,605,720K ÷ $63,152K
= 25.43

The payables turnover ratio measures how efficiently a company is managing its accounts payable by revealing how many times a company pays off its suppliers during a specific period. The higher the payables turnover ratio, the shorter the average time it takes for the company to pay its suppliers.

Analyzing The Cheesecake Factory's payables turnover over the past five years, we observe fluctuations in the ratio. In 2021, the payables turnover ratio was at its highest, indicating that The Cheesecake Factory efficiently managed its accounts payable by paying off its suppliers approximately 36 times during that year. The subsequent year, 2022, saw a slight decrease in the payables turnover ratio to 23.23, implying a slower rate of paying off suppliers compared to the previous year.

However, in 2023, the payables turnover ratio increased to 25.43, surpassing the 2022 performance. This suggests that The Cheesecake Factory improved its efficiency in managing accounts payable and paying suppliers in a timely manner. Comparing 2023 to earlier years like 2020 and 2019, the payables turnover ratio remains relatively stable around the mid-20s, indicating a consistent level of effectiveness in managing accounts payable during these years.

Overall, The Cheesecake Factory's payables turnover ratio displays variations from year to year, but the general trend points towards a reasonable level of efficiency in managing accounts payable and paying off suppliers promptly over the past five years.