The Cheesecake Factory (CAKE)

Debt-to-capital ratio

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Long-term debt	US$ in thousands	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	290,000	335,000	35,000	20,000
Total stockholders’ equity	US$ in thousands	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	571,742	533,816	540,279	542,244
Debt-to-capital ratio		0.60	0.59	0.59	0.61	0.62	0.59	0.56	0.57	0.59	0.59	0.62	0.47	0.49	0.54	0.52	0.48	0.34	0.39	0.06	0.04

December 31, 2023 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $470,047K ÷ ($470,047K + $318,062K)
= 0.60

The debt-to-capital ratio of The Cheesecake Factory has shown some fluctuations over the period under review. The ratio has ranged from as low as 0.04 to as high as 0.62. A decreasing trend was observed from the end of 2020 to mid-2021, with the ratio dropping from 0.49 to 0.47, before picking up again towards the end of 2021 and reaching 0.62 in the first quarter of 2022.

Subsequently, the ratio started declining again and reached 0.56 in the second quarter of 2022, followed by a further decrease to 0.57 in the third quarter of 2022. The ratio then saw some stability around the 0.59 mark in the fourth quarter of 2022 and the first half of 2023.

Overall, the debt-to-capital ratio has generally been above 0.5, indicating that the company relies more on debt financing relative to its capital structure. This suggests a moderate level of financial leverage in The Cheesecake Factory's capitalization, which can pose both risks and opportunities depending on the company's ability to manage its debt effectively in conjunction with its growth and profitability prospects.