The Cheesecake Factory (CAKE)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 178,317 | 108,566 | 38,935 | 82,318 | -347,437 |
| Long-term debt | US$ in thousands | 452,062 | 470,047 | 468,032 | 466,017 | 280,000 |
| Total stockholders’ equity | US$ in thousands | 443,455 | 318,062 | 292,003 | 330,166 | 288,693 |
| Return on total capital | 19.91% | 13.78% | 5.12% | 10.34% | -61.09% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $178,317K ÷ ($452,062K + $443,455K)
= 19.91%
The return on total capital for The Cheesecake Factory has shown fluctuations over the period from December 31, 2020, to December 31, 2024. Specifically, the return on total capital was negative at -61.09% as of December 31, 2020, indicating that the company was not generating sufficient returns relative to its total capital employed.
However, there was a significant improvement in the return on total capital by December 31, 2021, reaching 10.34%, suggesting a more efficient utilization of capital and earning a positive return on investment. This positive trend continued into the following years, with the return on total capital standing at 5.12% by December 31, 2022, 13.78% by December 31, 2023, and further increasing to 19.91% by December 31, 2024.
Overall, the upward trend in the return on total capital indicates an improvement in the company's ability to generate returns on the total capital employed, reflecting better operational efficiency and potentially more effective capital allocation strategies during the period under review.
Peer comparison
Dec 31, 2024