The Cheesecake Factory (CAKE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.17 | 0.17 | 0.10 | 0.10 |
| Debt-to-capital ratio | 0.60 | 0.62 | 0.59 | 0.49 | 0.34 |
| Debt-to-equity ratio | 1.48 | 1.60 | 1.41 | 0.97 | 0.51 |
| Financial leverage ratio | 8.93 | 9.50 | 8.47 | 9.52 | 4.97 |
The solvency ratios of The Cheesecake Factory indicate the company's ability to meet its long-term debt obligations and the extent to which it relies on debt financing.
The Debt-to-assets ratio has remained relatively stable at around 0.17 over the past five years, indicating that, on average, only 17% of the company's assets are financed by debt.
The Debt-to-capital ratio shows a slight fluctuation, with a peak of 0.62 in 2022 and a low of 0.34 in 2019. This ratio measures the proportion of total capital that is financed by debt, and the company's reliance on debt has increased over the years.
The Debt-to-equity ratio has also seen fluctuations, ranging from 0.51 in 2019 to 1.60 in 2022. This ratio indicates the extent to which the company relies on equity to finance its operations compared to debt, and a higher ratio suggests a greater reliance on debt financing.
The Financial leverage ratio has shown variability, with a substantial increase from 4.97 in 2019 to 9.50 in 2022. This ratio measures the company's financial leverage or the extent to which it uses debt to finance its assets. A higher ratio signifies more reliance on debt financing.
Overall, the analysis of The Cheesecake Factory's solvency ratios indicates a mixed picture of the company's financial health, with an increasing reliance on debt financing over the years, especially evident in the Debt-to-capital and Debt-to-equity ratios. Investors and stakeholders may need to monitor these ratios to assess the company's ability to manage its debt obligations effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | — | -434.30 | 172.66 |
The Cheesecake Factory's interest coverage ratio has fluctuated significantly over the past five years. In 2019, the company had an interest coverage ratio of 172.66, indicating a strong ability to cover its interest expenses with operating income. However, this ratio turned negative in 2020, reaching -434.30, which suggests that the operating income was insufficient to cover the interest expenses during that period. Unfortunately, the data for 2021, 2022, and 2023 is missing, making it difficult to provide a complete picture of the company's recent interest coverage performance.