The Cheesecake Factory (CAKE)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 0.47 0.44 0.43 0.43 0.46 0.44 0.48 0.50 0.53 0.52 0.63 0.62 0.64 0.56 0.55 0.62 0.58 0.76 0.85 0.53
Quick ratio 0.14 0.12 0.10 0.12 0.12 0.14 0.18 0.19 0.21 0.26 0.38 0.37 0.35 0.31 0.33 0.39 0.33 0.58 0.66 0.30
Cash ratio 0.12 0.08 0.06 0.09 0.09 0.10 0.15 0.19 0.17 0.22 0.31 0.31 0.30 0.24 0.27 0.33 0.26 0.45 0.47 0.16

The current ratio of The Cheesecake Factory has exhibited fluctuations over the periods analyzed. It started at a low of 0.53 on March 31, 2020, increased to 0.85 on June 30, 2020, and then generally declined to 0.47 as of December 31, 2024. This indicates a downward trend in the company's ability to cover its short-term liabilities with its current assets.

The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also showed variation over time. This ratio ranged from a low of 0.10 on June 30, 2024, to a high of 0.66 on June 30, 2020. The general trend indicates a decrease in the company's ability to meet its short-term obligations using its most liquid assets.

Furthermore, the cash ratio, which focuses solely on cash and cash equivalents as a proportion of current liabilities, demonstrated similar movement. It ranged from 0.06 on June 30, 2024, to 0.47 on June 30, 2020. This suggests fluctuations in the company's ability to settle its short-term obligations solely with its cash resources.

Overall, the liquidity ratios of The Cheesecake Factory reflect some inconsistencies and potential challenges in managing short-term obligations with available assets, especially as shown by the declining trends in the current and quick ratios. Further analysis and attention to working capital management may be necessary to improve the company's liquidity position.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 2.31 4.57 3.11 3.01 0.94 4.45 -1.20 0.53 -0.23 3.26 3.46 1.69 2.40 3.49 2.33 2.26 2.22 6.57 12.93 8.78

The cash conversion cycle of The Cheesecake Factory has exhibited fluctuations over the years, reflecting changes in its operating efficiency. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2022, the company managed to significantly reduce its cash conversion cycle from a high of 12.93 days to a negative -0.23 days, indicating that the company was able to generate cash at a faster rate relative to its operating cycle. This improvement suggests enhanced efficiency in managing its working capital and turning its resources into cash effectively.

However, in the subsequent periods from March 31, 2023, to December 31, 2024, the cash conversion cycle experienced some fluctuations, indicating a longer time to convert investments into cash flows. While negative values indicate the company was able to convert investments into cash faster than completing a full operating cycle, positive values indicate a longer cycle.

Overall, analyzing the cash conversion cycle helps to evaluate how effectively The Cheesecake Factory manages its working capital, inventory levels, and receivables to generate cash flows, which is crucial for assessing the company's liquidity and operational efficiency. It is important for the company to monitor and optimize its cash conversion cycle to ensure healthy cash flow management and operational performance.