CAVA Group, Inc. (CAVA)

Short-term

Turnover ratios

The activity ratios of CAVA Group, Inc. for the period analyzed reveal insights into the company's operational efficiency and working capital management.

Inventory Turnover:
The inventory turnover ratio indicates how efficiently inventory is managed and sold. The ratio shows a generally increasing trend from 92.68 times as of September 30, 2022, to a peak of 114.24 times by March 31, 2023, suggesting a period of improved inventory management and faster inventory turnover. Although there is some fluctuation afterward, the ratio remains relatively high, reaching 105.69 times at the end of 2023, and later slightly decreasing to 101.74 times by March 31, 2024. By June 30, 2024, it drops to 95.63 but then increases again to 99.07 at the end of September 2024 and remains stable at that level through December 2024 and March 2025 (108.48). The overall upward trend from the initial period indicates a trend toward more effective inventory utilization over time.

Receivables Turnover:
The receivables turnover ratio demonstrates the company's efficiency in collecting receivables. The ratio experienced a peak of 72.93 times at the end of 2022 but declined significantly to 52.81 times by March 31, 2023. Subsequently, it shows signs of recovery, increasing to 61.31 times by the end of 2023, with further improvement to 66.88 times in March 2024 and reaching 74.15 times at the end of 2024. As of March 2025, the ratio slightly decreases to 65.12. This pattern suggests initial challenges in receivables collection during early 2023, followed by a recovery and improvement in collection efficiency over time.

Payables Turnover:
The payables turnover ratio reflects how quickly the company pays its suppliers. The ratio fluctuates throughout the period without a clear unidirectional trend. It was relatively stable around 33 times at the start of the period, peaking at 41.51 times in September 2023, then decreasing to approximately 28.68 times by September 2024. The ratio remains in a range around 30 times through March 2025, indicating consistent but somewhat cautious management of accounts payable, with periods of acceleration and deceleration possibly reflecting strategic payment timing.

Working Capital Turnover:
As the company’s data on working capital turnover becomes available from June 30, 2023, onward, the ratios show a steady upward trajectory, increasing from 2.48 to 3.86 by March 31, 2025. This indicates an improvement in the efficiency of utilizing working capital to generate sales or revenue, reflecting more effective management of short-term assets and liabilities.

Overall, the activity ratios suggest improvements in operational efficiency over the period. Inventory turnover has strengthened, indicating faster inventory sales; receivables turnover has recovered and improved, reflecting better receivables collection efforts; payables turnover remains steady with slight fluctuations, and working capital efficiency has continuously increased in recent periods. These trends collectively point toward a positive trajectory in operational performance and working capital management.

---

Average number of days

The activity ratios for CAVA Group, Inc. illustrate the company's operational efficiency in managing inventories, receivables, and payables over a series of periods from September 2022 to March 2025.

Days of Inventory on Hand (DOH):
The DOH remained relatively stable, with minor fluctuations around an average of approximately 3.7 days throughout the period. Initially, the DOH was at 3.94 days in September 2022, gradually decreasing to its lowest point of 3.20 days in March 2023. Post this period, it experienced slight increases, reaching 3.80 days in June 2023, then settling around 3.68 to 3.71 days towards the end of 2023 and early 2024. A modest rise to 3.82 days occurred in June 2024 before stabilizing again, indicating consistent inventory management practices with inventory turnover cycles approximately every 3.2 to 3.9 days.

Days of Sales Outstanding (DSO):
The DSO figures portray a generally low and stable receivable collection period, averaging roughly 5.27 to 6.91 days. A noticeable peak of 6.91 days emerged in March 2023, whereas the shortest collection period was recorded as 4.92 days in December 2024. Over most of the period, the DSO hovered around 5 to 6.8 days, suggesting efficient receivables collection with minimal delays, indicative of prompt customer payments and effective credit policies.

Number of Days of Payables:
The payables period varied more noticeably over the time frame, ranging from approximately 8.79 days in September 2023 to a high of 13.25 days in March 2023. The relatively longer payable periods, particularly the peaks above 12 days, imply that the company leveraged supplier credit terms efficiently, delaying payments without adversely affecting supplier relationships. In earlier periods, payables hovered around 10 to 11 days, but towards the end of the sample, an increase to above 12 days suggests an effort to optimize working capital by extending payment cycles.

In summary, CAVA Group, Inc. demonstrated disciplined inventory and receivables management, maintaining low and consistent turnover periods which reflect operational efficiency and liquidity. The fluctuations in days payable indicate strategic management of supplier payment terms, balancing cash flow with supplier relationships. The overall activity ratios suggest a company focused on maintaining tight control over working capital components, minimizing holding periods while ensuring timely cash inflows and strategic debt management.

---

Long-term

CAVA Group, Inc.'s long-term activity ratios reveal insights into its asset utilization efficiency over the reporting periods. The fixed asset turnover ratio is unavailable or not reported for most periods, with only partial data available for the quarter ending March 31, 2023, at 1.11, and slightly declining to 1.10 by June 30, 2023, before returning to 1.11 in the subsequent quarter ending September 30, 2023. This suggests that during this period, the company leveraged its fixed assets (such as property, plant, and equipment) with moderate stability, indicating a consistent efficiency level in utilizing its long-term assets to generate sales.

In contrast, the total asset turnover ratio demonstrates a more dynamic pattern. Starting at 0.84 as of September 30, 2022, it gradually increased through subsequent periods, reaching 0.86 at the end of December 2022 and 0.90 by March 31, 2023. This upward trajectory signifies improved overall asset utilization efficiency during this interval. However, a notable decline is observed in the June 30, 2023, period, where the ratio drops to 0.66, indicating a decrease in how effectively the company is using its total assets to generate sales. Subsequently, the ratio improves modestly to 0.69 by September 30, 2023, and remains relatively stable through the rest of 2023, with values around 0.69 to 0.85 into early 2024, ultimately reaching 0.84 by March 31, 2025.

Overall, the data suggest that while CAVA Group, Inc. experienced periods of declining asset turnover efficiency, particularly in mid-2023, there has been a general trend toward stabilization and slight improvement in asset utilization over time. The consistency in the total asset turnover ratios and the modest variation in fixed asset turnover reflect efforts to optimize asset performance amidst changing operational conditions.