The Cheesecake Factory (CAKE)

Debt-to-equity ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
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
Debt-to-equity ratio		1.48	1.60	1.41	0.97	0.51

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $470,047K ÷ $318,062K
= 1.48

The trend of The Cheesecake Factory's debt-to-equity ratio over the past five years indicates an increasing level of debt relative to equity. The ratio has risen steadily from 0.51 in 2019 to 1.48 in 2023. This suggests that the company has been relying more on debt financing compared to equity financing over this period.

In 2020, the ratio experienced a significant jump to 0.97, indicating a shift towards higher debt levels. Subsequently, the ratio continued to climb, reaching 1.60 by the end of 2022. This increase in the ratio suggests that the company's debt levels have been outpacing its equity growth during this time frame.

While a higher debt-to-equity ratio can potentially signal higher financial risk and leverage, it is important to consider the industry norms and the company's specific circumstances. The upward trend in The Cheesecake Factory's debt-to-equity ratio may require monitoring to ensure that the company maintains a healthy balance between debt and equity in its capital structure.