The Cheesecake Factory (CAKE)

Return on equity (ROE)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands 156,783 101,351 43,123 72,373 -253,365
Total stockholders’ equity US$ in thousands 443,455 318,062 292,003 330,166 288,693
ROE 35.35% 31.87% 14.77% 21.92% -87.76%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $156,783K ÷ $443,455K
= 35.35%

The return on equity (ROE) for The Cheesecake Factory has shown significant fluctuation over the years based on the provided data. In 2020, the ROE was -87.76%, indicating that the company had a negative return relative to its equity during that period. However, there was a notable turnaround in 2021, with the ROE jumping to 21.92%, implying a positive return on the equity invested. The upward trend continued in 2022 and 2023, with ROE figures of 14.77% and 31.87%, respectively, suggesting improved profitability and efficiency in utilizing shareholder funds.

By the end of 2024, The Cheesecake Factory exhibited a further increase in ROE to 35.35%, indicating a robust performance in generating profit from shareholders' equity. Overall, the positive trajectory of the ROE reflects the company's ability to generate higher returns on the capital invested by shareholders over the years, signifying improved financial health and potential attractiveness to investors.