The Cheesecake Factory (CAKE)

Operating return on assets (Operating ROA)

		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
Operating income (ttm)	US$ in thousands	178,317	139,824	125,154	113,933	108,566	85,304	64,069	44,540	38,935	55,037	88,619	101,795	82,318	42,528	-23,707	-148,535	-347,437	-302,239	-240,417	-116,608
Total assets	US$ in thousands	3,041,760	2,935,790	2,879,590	2,837,640	2,840,380	2,776,890	2,769,710	2,742,490	2,775,220	2,734,070	2,772,430	2,753,740	2,798,120	2,717,720	2,722,290	2,735,440	2,747,050	2,828,060	2,867,280	2,675,780
Operating ROA		5.86%	4.76%	4.35%	4.02%	3.82%	3.07%	2.31%	1.62%	1.40%	2.01%	3.20%	3.70%	2.94%	1.56%	-0.87%	-5.43%	-12.65%	-10.69%	-8.38%	-4.36%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $178,317K ÷ $3,041,760K
= 5.86%

The operating return on assets (operating ROA) of The Cheesecake Factory has shown a fluctuating trend over the observed periods.

From March 31, 2020, to December 31, 2021, the operating ROA was in negative territory, indicating that the company was not efficiently utilizing its assets to generate operating profits. This could be a worrisome sign for investors and stakeholders as it suggests operational inefficiencies.

However, from March 31, 2022, onwards, the operating ROA started to improve, turning positive and displaying a consistent upward trajectory. This could be seen as a positive signal for the company, indicating that it was becoming more effective in generating operating income relative to its assets.

By December 31, 2024, the operating ROA had increased to 5.86%, signaling a significant improvement in the company's operational performance and asset utilization efficiency. This positive trend suggests that The Cheesecake Factory was able to boost its profitability through better operational management and asset utilization strategies.

Overall, the recent positive trend in operating ROA is a promising sign for the company's financial health and operational effectiveness.