The Cheesecake Factory (CAKE)

Debt-to-equity ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
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
Debt-to-equity ratio 1.02 1.48 1.60 1.41 0.97

December 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $452,062K ÷ $443,455K
= 1.02

The debt-to-equity ratio of The Cheesecake Factory has shown a fluctuating trend over the past five years. As of December 31, 2020, the ratio stood at 0.97, indicating that the company had a lower level of debt relative to its equity. However, this ratio increased steadily over the following years, reaching 1.41 by December 31, 2021, and further rising to 1.60 by December 31, 2022. This suggests a higher reliance on debt financing compared to equity during these periods.

Subsequently, there was a slight decrease in the ratio to 1.48 by December 31, 2023, which may indicate some efforts to manage the debt levels. Finally, by December 31, 2024, the ratio decreased significantly to 1.02, signaling a reduction in the proportion of debt relative to equity.

Overall, the trend in The Cheesecake Factory's debt-to-equity ratio reflects varying levels of debt utilization over the years, with potential implications for the company's financial leverage, risk profile, and capital structure. Further analysis and consideration of industry benchmarks are recommended to gain a more comprehensive understanding of the company's debt management strategies.