The Cheesecake Factory (CAKE)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	333,313	300,798	345,768	405,589	341,359
Total current liabilities	US$ in thousands	711,420	660,671	656,678	636,273	586,067
Current ratio		0.47	0.46	0.53	0.64	0.58

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $333,313K ÷ $711,420K
= 0.47

The current ratio of The Cheesecake Factory, as represented by the available data, has exhibited a fluctuating trend over the past five years. The ratio indicates the level of liquidity and ability of the company to meet its short-term obligations using its current assets.

In December 2020, the current ratio was 0.58, suggesting that the company's current assets were relatively lower compared to its current liabilities. Subsequently, there was a slight improvement in the ratio to 0.64 by December 2021, implying a better capacity to cover short-term debts.

However, the trend reversed in the following years, with the current ratio decreasing to 0.53 by December 2022, and further declining to 0.46 and 0.47 by December 2023 and December 2024, respectively. These declining ratios indicate that the company's current assets may be becoming less sufficient to cover its short-term liabilities effectively.

The decreasing current ratio trend over the past few years may raise concerns about the company's liquidity position and its ability to meet immediate financial obligations. Further analysis and monitoring of the company's liquidity management and working capital practices would be advisable to address potential liquidity risks and improve the current ratio in the future.