The Cheesecake Factory (CAKE)

Interest coverage

		Jan 31, 2025	Dec 31, 2024	Oct 31, 2024	Sep 30, 2024	Jul 31, 2024	Jun 30, 2024	Apr 30, 2024	Mar 31, 2024	Jan 31, 2024	Dec 31, 2023	Oct 31, 2023	Sep 30, 2023	Jul 31, 2023	Jun 30, 2023	Apr 30, 2023	Mar 31, 2023	Jan 31, 2023	Dec 31, 2022	Oct 31, 2022	Sep 30, 2022
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	163,501	180,657	192,717	207,394	212,987	199,703	149,150	121,265	101,002	95,766	135,098	151,963	166,859	103,631	41,037	1,475	-34,656	12,410	55,475	87,099
Interest expense (ttm)	US$ in thousands	5,998	4,213	4,213	4,109	4,109	4,244	4,244	4,510	4,510	4,189	4,189	4,042	4,042	4,017	4,017	3,452	3,452	2,445	2,445	2,591
Interest coverage		27.26	42.88	45.74	50.47	51.83	47.06	35.14	26.89	22.40	22.86	32.25	37.60	41.28	25.80	10.22	0.43	-10.04	5.08	22.69	33.62

January 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $163,501K ÷ $5,998K
= 27.26

The interest coverage ratio for The Cheesecake Factory indicates the company's ability to meet its interest obligations with its earnings. A higher interest coverage ratio is generally seen as favorable, suggesting that the company is generating enough operating income to comfortably cover its interest expenses.

Looking at the data provided, we observe fluctuations in The Cheesecake Factory's interest coverage ratio over time. The ratio was relatively strong in the earlier periods, with values above 20 and peaking at around 51.83 in July 2024. This indicates that the company's operating income was sufficient to cover its interest expenses several times over.

However, there are also periods where the interest coverage ratio dipped significantly, such as in January 2023 and March 2023 when the ratios were negative or close to 0. This suggests that during these periods, the company may have been facing challenges in generating enough operating income to cover its interest costs.

Overall, the trend shows some volatility in the interest coverage ratio, with fluctuations in performance over the periods analyzed. It would be important to further investigate the reasons behind these fluctuations to understand the underlying drivers impacting The Cheesecake Factory's ability to cover its interest expenses.