The Cheesecake Factory (CAKE)

Return on total capital

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	108,566	38,935	82,318	-347,437	103,598
Long-term debt	US$ in thousands	470,047	468,032	466,017	280,000	290,000
Total stockholders’ equity	US$ in thousands	318,062	292,003	330,166	288,693	571,742
Return on total capital		13.78%	5.12%	10.34%	-61.09%	12.02%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $108,566K ÷ ($470,047K + $318,062K)
= 13.78%

The return on total capital for The Cheesecake Factory has fluctuated over the past five years. In 2023, the return on total capital was 13.78%, indicating that the company generated a return of 13.78% for each dollar of total capital employed. This represents a significant improvement compared to the previous year, where the return on total capital was 5.12%.

Looking back further, in 2021 the return on total capital was 10.34%, showing a positive performance, while in 2020 there was a significant decline with a negative return on total capital of -61.09%, which may indicate challenges faced by the company during that year.

In 2019, the return on total capital was 12.02%, reflecting a solid performance that year. Overall, the trend in return on total capital for The Cheesecake Factory has been somewhat volatile, with positive years followed by significant fluctuations. It is crucial for the company to work towards maintaining consistent and positive returns on total capital to ensure sustainable growth and profitability in the long term.