The Cheesecake Factory (CAKE)
Cash conversion cycle
| Jan 31, 2025 | Dec 31, 2024 | Jan 31, 2024 | Dec 31, 2023 | Jan 31, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 29.22 | 14.17 | 10.36 | 13.11 | 10.02 |
| Days of sales outstanding (DSO) | days | — | 1.77 | — | 2.19 | — |
| Number of days of payables | days | — | 13.64 | — | 14.36 | — |
| Cash conversion cycle | days | 29.22 | 2.31 | 10.36 | 0.94 | 10.02 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.22 + — – —
= 29.22
The cash conversion cycle of The Cheesecake Factory has shown fluctuations over the past few years.
- As of January 31, 2023, the cash conversion cycle stood at 10.02 days, indicating that the company took approximately 10 days to convert its investments in inventory and accounts receivable into cash.
- By December 31, 2023, the cash conversion cycle decreased significantly to 0.94 days, suggesting a more efficient management of working capital during that period.
- However, by January 31, 2024, the cash conversion cycle increased to 10.36 days, signifying a delay in converting investments back into cash.
- The trend reversed again by December 31, 2024, with a notable decrease to 2.31 days, showcasing an improvement in the efficiency of working capital management.
- The cycle lengthened significantly by January 31, 2025, reaching 29.22 days, indicating a potential challenge in converting investments into cash promptly during that period.
Overall, the fluctuation in The Cheesecake Factory's cash conversion cycle highlights varying effectiveness in managing its working capital and converting investments into cash over the analyzed periods.
Peer comparison
Jan 31, 2025