The Cheesecake Factory (CAKE)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 53.32% | 53.13% | 33.58% | 22.94% | 33.48% |
| Operating profit margin | 3.16% | 1.18% | 2.81% | -17.53% | 4.17% |
| Pretax margin | 2.91% | 1.00% | 2.45% | -17.96% | 5.65% |
| Net profit margin | 2.95% | 1.31% | 2.47% | -12.78% | 5.13% |
The Cheesecake Factory's profitability ratios have shown fluctuations over the past five years. The gross profit margin has been relatively stable, with a slight increase from 33.58% in 2021 to 53.32% in 2023. This indicates that the company has been able to maintain a healthy level of profitability on its sales.
In terms of operating profit margin, there has been a significant improvement from -17.53% in 2020 to 3.16% in 2023. This suggests that the company has been able to control its operating expenses more effectively and generate profit from its core operations.
The pretax margin has also shown an upward trend, increasing from -17.96% in 2020 to 2.91% in 2023. This indicates improved overall financial performance before accounting for taxes.
The net profit margin, which reflects the company's bottom line profitability, has shown improvement as well, increasing from -12.78% in 2020 to 2.95% in 2023. This indicates that The Cheesecake Factory has been able to generate stronger profits after accounting for all expenses and taxes.
Overall, while there have been fluctuations in profitability ratios over the years, The Cheesecake Factory has shown improvement in its ability to generate profits and manage expenses, leading to stronger financial performance in recent years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.82% | 1.40% | 2.94% | -12.65% | 3.65% |
| Return on assets (ROA) | 3.57% | 1.55% | 2.59% | -9.22% | 4.48% |
| Return on total capital | 13.78% | 5.12% | 10.34% | -61.09% | 12.02% |
| Return on equity (ROE) | 31.87% | 14.77% | 21.92% | -87.76% | 22.26% |
The profitability ratios of The Cheesecake Factory show varying trends over the years, indicating the company's fluctuating performance.
1. Operating return on assets (Operating ROA) has seen significant improvement from -12.65% in 2020 to 3.82% in 2023, reflecting better operational efficiency in generating profits from its assets.
2. Return on assets (ROA) also improved over the years, reaching 3.57% in 2023 from a low of -9.22% in 2020. This ratio measures the overall profitability of the company in utilizing its assets to generate earnings.
3. Return on total capital has shown a positive trend, increasing to 13.78% in 2023 from a low of -61.09% in 2020. This metric indicates the company's ability to generate returns for both debt and equity holders.
4. Return on equity (ROE) has demonstrated a similar positive trajectory, rising to 31.87% in 2023 from a low of -87.76% in 2020. ROE reflects how effectively the company is using shareholders' equity to generate profits.
Overall, The Cheesecake Factory has shown improvements in profitability ratios over the years, indicating better operational performance and efficiency in utilizing its assets and capital to generate returns for its stakeholders.