The Cheesecake Factory (CAKE)

Return on equity (ROE)

Jan 31, 2025 Dec 31, 2024 Oct 31, 2024 Sep 30, 2024 Jul 31, 2024 Jun 30, 2024 Apr 30, 2024 Mar 31, 2024 Jan 31, 2024 Dec 31, 2023 Oct 31, 2023 Sep 30, 2023 Jul 31, 2023 Jun 30, 2023 Apr 30, 2023 Mar 31, 2023 Jan 31, 2023 Dec 31, 2022 Oct 31, 2022 Sep 30, 2022
Net income (ttm) US$ in thousands 142,296 153,586 164,876 168,073 171,270 131,507 91,744 76,498 61,252 91,246 121,240 131,345 141,450 95,477 49,504 19,056 -11,392 17,562 46,516 72,077
Total stockholders’ equity US$ in thousands 443,455 443,455 396,379 396,379 373,980 373,980 332,438 332,438 318,062 318,062 321,644 321,644 325,903 325,903 299,839 299,839 292,003 292,003 323,496 323,496
ROE 32.09% 34.63% 41.60% 42.40% 45.80% 35.16% 27.60% 23.01% 19.26% 28.69% 37.69% 40.84% 43.40% 29.30% 16.51% 6.36% -3.90% 6.01% 14.38% 22.28%

January 31, 2025 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $142,296K ÷ $443,455K
= 32.09%

The Return on Equity (ROE) is a financial ratio that measures a company's profitability by calculating how much profit a company generates with shareholders' equity. ROE is a key indicator of a company's efficiency in utilizing shareholders' funds to generate earnings.

Analyzing the ROE trend of The Cheesecake Factory from September 2022 to January 2025, we observe fluctuations in the ratio. The ROE was relatively stable around 20%-30% levels from September 2022 to September 2023, indicating consistent profitability and efficient use of shareholders' equity during this period.

From September 2023 to January 2025, there was a general upward trend in ROE, with the ratio reaching a peak of 45.80% in July 2024. This suggests that The Cheesecake Factory was able to improve its profitability and generate higher returns for shareholders during this period.

However, it is important to note the negative ROE of -3.90% in January 2023. A negative ROE indicates that the company did not generate sufficient profits to cover shareholder equity, which raises concerns about its financial health and operational efficiency during that specific period.

Overall, the upward trend in ROE from September 2023 to January 2025, with occasional fluctuations, reflects positively on The Cheesecake Factory's ability to effectively utilize shareholders' equity and generate increased profitability over time. Investors and stakeholders may view this trend as a positive indicator of the company's financial performance and management efficiency.