The Cheesecake Factory (CAKE)

Short-term

Turnover ratios

The Cheesecake Factory's activity ratios provide insight into the efficiency of the company's operations.

1. Inventory Turnover: The company's inventory turnover ratio fluctuates over the reporting periods, ranging from a high of 41.56 to a low of 22.57. Overall, the trend shows a gradual decline in inventory turnover, suggesting that the company is holding onto inventory for a longer period before selling it.

2. Receivables Turnover: The data indicates inconsistent reporting of receivables turnover, with several periods showing no information provided. When data is available, the ratios vary significantly, indicating that the company's collection of receivables fluctuates.

3. Payables Turnover: The payables turnover ratio also displays inconsistency in reporting, with some periods missing data. The available ratios show varying payment cycles, with the company taking longer to pay its suppliers in some periods compared to others.

4. Working Capital Turnover: No data is provided for the working capital turnover ratio across all reporting periods, making it challenging to evaluate how effectively the company is utilizing its working capital to generate sales.

Overall, the fluctuations and inconsistent reporting in these activity ratios suggest a need for closer monitoring of The Cheesecake Factory's inventory management, accounts receivable collection, and accounts payable processes to improve operational efficiency and cash flow management.

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Average number of days

The Cheesecake Factory's activity ratios provide insights into the efficiency of its operations.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measure how quickly the company sells its inventory.
- The trend shows fluctuations in inventory management, with a range from 9.61 days to 16.17 days over the observed periods.
- Generally, lower DOH values indicate faster inventory turnover, which can free up cash flow and reduce storage costs.

2. Days of Sales Outstanding (DSO):
- DSO indicates how quickly the company collects cash from its sales.
- The data reflects a varying collection period, ranging from 1.79 days to 2.97 days.
- Lower DSO values are favorable as they imply quicker collection of receivables, enhancing cash flow and liquidity.

3. Number of Days of Payables:
- This metric reflects how long the company takes to pay its suppliers.
- The company shows payment periods ranging from 9.25 days to 14.80 days.
- A longer payment period may indicate effective cash flow management but could also strain supplier relationships.

Overall, monitoring these activity ratios can help assess The Cheesecake Factory's efficiency in managing its inventory, collections, and payables, which are crucial for maintaining financial health.

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Long-term

The Cheesecake Factory's fixed asset turnover ratio fluctuated over the period under consideration, ranging from a low of 1.63 to a high of 4.55. This ratio indicates the company's efficiency in generating sales from its fixed assets. A higher fixed asset turnover ratio generally reflects better asset utilization.

On the other hand, the total asset turnover ratio remained relatively stable, with values mostly hovering around 1.20 to 1.25. This ratio measures the efficiency of the company in generating sales from all its assets. A higher total asset turnover ratio suggests that the company is effectively using its assets to generate revenue.

Overall, while the fixed asset turnover ratio showed more variability, the total asset turnover ratio remained relatively steady. The company's ability to efficiently generate revenue from both its fixed and total assets is an important indicator of its operational efficiency and asset utilization.