The Cheesecake Factory (CAKE)

Return on total capital

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	178,317	139,824	125,154	113,933	108,566	85,304	64,069	44,540	38,935	55,037	88,619	101,795	82,318	42,528	-23,707	-148,535	-347,437	-302,239	-240,417	-116,608
Long-term debt	US$ in thousands	452,062	471,558	471,054	470,551	470,047	469,543	469,040	468,536	468,032	467,528	467,025	466,521	466,017	465,514	465,010	280,000	280,000	376,000	376,000	380,000
Total stockholders’ equity	US$ in thousands	443,455	396,379	373,980	332,438	318,062	321,644	325,903	299,839	292,003	323,496	361,684	355,326	330,166	321,946	284,608	316,514	288,693	322,276	351,929	418,971
Return on total capital		19.91%	16.11%	14.81%	14.19%	13.78%	10.78%	8.06%	5.80%	5.12%	6.96%	10.69%	12.39%	10.34%	5.40%	-3.16%	-24.90%	-61.09%	-43.28%	-33.03%	-14.59%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $178,317K ÷ ($452,062K + $443,455K)
= 19.91%

The Return on Total Capital (ROTC) for The Cheesecake Factory shows a fluctuating trend over the given time periods.

The company experienced negative ROTC figures in the first half of 2020, with values ranging from -14.59% in March 2020 to -61.09% in December 2020, indicating that the company was not efficiently generating returns relative to its total capital employed during that period.

From March 2021 onwards, the ROTC steadily improved, turning positive by September 2021 at 5.40% and continued to increase in the following quarters, reaching 19.91% by December 2024. This positive trend in ROTC suggests that The Cheesecake Factory has been more effective in utilizing its total capital to generate returns for its investors and stakeholders over the later period covered in the data.

Overall, the upward trajectory in ROTC from 2021 to 2024 reflects an improvement in the company's operational efficiency and financial performance in generating returns relative to its total capital base.