The Cheesecake Factory (CAKE)

Return on equity (ROE)

		Jan 31, 2025	Dec 31, 2024	Jan 31, 2024	Dec 31, 2023	Jan 31, 2023
Net income	US$ in thousands	156,783	156,783	101,351	101,351	43,123
Total stockholders’ equity	US$ in thousands	443,455	443,455	318,062	318,062	292,003
ROE		35.35%	35.35%	31.87%	31.87%	14.77%

January 31, 2025 calculation

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

The return on equity (ROE) measures a company's ability to generate profits from its shareholders' equity. Analyzing The Cheesecake Factory's ROE over the past few years reveals a positive trend.

As of January 31, 2023, the ROE stood at 14.77%, indicating that for every dollar of equity invested by shareholders, the company generated a return of 14.77%. By December 31, 2023, the ROE had increased significantly to 31.87%, demonstrating an improvement in the company's profitability and efficiency in utilizing shareholder equity.

The trend continued into January 31, 2024, and December 31, 2024, with the ROE remaining constant at 31.87% before further increasing to 35.35% by January 31, 2025. This sustained high level of ROE suggests that The Cheesecake Factory has been effectively utilizing its shareholders' equity to generate profits.

Overall, the increasing trend in ROE over the years indicates that The Cheesecake Factory has been efficiently generating returns for its shareholders and effectively managing its equity to drive profitability.