The Cheesecake Factory (CAKE)
Cash conversion cycle
| Jan 31, 2025 | Dec 31, 2024 | Oct 31, 2024 | Sep 30, 2024 | Jul 31, 2024 | Jun 30, 2024 | Apr 30, 2024 | Mar 31, 2024 | Jan 31, 2024 | Dec 31, 2023 | Oct 31, 2023 | Sep 30, 2023 | Jul 31, 2023 | Jun 30, 2023 | Apr 30, 2023 | Mar 31, 2023 | Jan 31, 2023 | Dec 31, 2022 | Oct 31, 2022 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 10.77 | 9.61 | 11.04 | 10.99 | 11.11 | 11.18 | 9.77 | 11.06 | 9.85 | 11.23 | 12.36 | 12.21 | 12.62 | 12.40 | 16.17 | 13.94 | 11.78 | 10.49 | 8.78 | 9.71 |
| Days of sales outstanding (DSO) | days | — | 1.79 | — | 2.97 | — | 2.55 | — | 2.08 | — | 2.22 | — | 2.55 | — | 2.38 | — | — | — | 2.39 | — | 2.67 |
| Number of days of payables | days | — | 9.25 | — | 9.87 | — | 10.81 | — | 10.37 | — | 12.30 | — | 11.11 | — | 14.80 | — | 13.47 | — | 12.59 | — | 9.20 |
| Cash conversion cycle | days | 10.77 | 2.15 | 11.04 | 4.09 | 11.11 | 2.91 | 9.77 | 2.77 | 9.85 | 1.15 | 12.36 | 3.65 | 12.62 | -0.03 | 16.17 | 0.47 | 11.78 | 0.29 | 8.78 | 3.17 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 10.77 + — – —
= 10.77
The cash conversion cycle of The Cheesecake Factory fluctuated over the periods outlined in the data provided, indicating variability in the company's efficiency in converting its resources into cash. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash received from customers.
The company experienced a range of cash conversion cycle lengths, ranging from a negative cycle (indicating efficient management of resources) to longer cycles (indicating delays in collecting cash). Notably, there were instances of extremely short cycles, such as negative 0.03 days on June 30, 2023, and longer cycles, such as 16.17 days on April 30, 2023.
The inconsistency in the cash conversion cycle could be attributed to various factors, including changes in sales volume, inventory management practices, and collection periods from customers. It is crucial for The Cheesecake Factory to monitor and manage its cash conversion cycle effectively to optimize operational efficiency and working capital management.
Analyzing the trend over time can provide insights into the company's performance and financial health. Continuous monitoring and improvement of the cash conversion cycle are essential for ensuring liquidity, profitability, and sustainable growth in the long run.
Peer comparison
Jan 31, 2025