The Cheesecake Factory (CAKE)

Interest coverage

		Jan 31, 2025	Dec 31, 2024	Jan 31, 2024	Dec 31, 2023	Jan 31, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	181,154	178,317	109,766	108,566	83,190
Interest expense	US$ in thousands	10,107	—	8,552	—	6,043
Interest coverage		17.92	—	12.84	—	13.77

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $181,154K ÷ $10,107K
= 17.92

The interest coverage ratio of The Cheesecake Factory has shown a generally strong performance over the period analyzed. As of January 31, 2023, the interest coverage stood at 13.77, indicating that the company's operating income was 13.77 times its interest expense, which suggests a healthy ability to meet interest obligations.

In December 31, 2023, the data is not available ("—"), which may indicate a change in reporting or data availability for that period. However, it is noteworthy that there was a decrease in the interest coverage ratio to 12.84 as of January 31, 2024. Despite this decline, the ratio remained at a level that indicates a comfortable margin of safety in meeting interest payments.

The interest coverage ratio improved notably to 17.92 as of January 31, 2025, suggesting a strengthening ability to cover interest expenses with operating income. Overall, The Cheesecake Factory has demonstrated consistent or improving interest coverage levels, indicating a solid financial position in managing its debt obligations. It is essential to monitor future results to assess the company's ability to maintain or enhance its interest coverage ratio.