Shake Shack Inc (SHAK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 112.85 | 127.52 | 124.03 | 112.57 | 107.39 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 6.92 | 6.38 | 4.59 | 2.57 | 5.59 |
Shake Shack Inc's inventory turnover has shown a positive trend over the years, increasing from 107.39 in 2020 to 112.85 in 2024. This indicates that the company is efficiently managing its inventory and generating sales from it at a faster rate.
The receivables turnover for Shake Shack Inc is not available for analysis as the data is marked as "—". Receivables turnover is a measure of how efficiently a company is collecting its accounts receivable, and the absence of this data makes it challenging to assess the company's effectiveness in managing its receivables.
Similarly, the payables turnover data is also not provided ("—"), which would have helped in analyzing how quickly the company is paying its suppliers. Payables turnover is crucial as it reflects the company's payment policies and liquidity management.
On the other hand, Shake Shack Inc's working capital turnover has shown a fluctuating pattern, starting at 5.59 in 2020, dropping to 2.57 in 2021, and gradually increasing to 6.92 in 2024. A higher working capital turnover ratio indicates that the company is generating more revenue from its working capital, which is a positive sign of efficiency in utilizing its resources.
In conclusion, while Shake Shack Inc demonstrates strong inventory turnover and improving working capital turnover, the lack of data on receivables turnover and payables turnover limits a comprehensive analysis of the company's overall operational efficiency and financial management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.23 | 2.86 | 2.94 | 3.24 | 3.40 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios of Shake Shack Inc provide insights into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH):
- Shake Shack Inc showed a decreasing trend in DOH over the years, indicating that the company's inventory turnover improved.
- The company managed to reduce the number of days it takes to turn its inventory into sales, which is a positive sign of efficiency in managing its inventory levels.
2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO), which measures how long it takes for the company to collect its accounts receivable. Without this information, we cannot assess the efficiency of Shake Shack Inc in collecting payments from its customers.
3. Number of Days of Payables:
- Similarly, the data does not include details on the Number of Days of Payables, which evaluates how long it takes for the company to pay its suppliers. Absence of this information restricts our ability to evaluate Shake Shack Inc's efficiency in managing its payables.
In summary, based on the provided data, Shake Shack Inc has shown improvements in managing its inventory efficiently over the years. However, without the information on DSO and payables, a comprehensive assessment of the company's overall activity ratios cannot be made.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 1.93 | 1.90 | 0.81 |
| Total asset turnover | 0.74 | 0.68 | 0.60 | 0.51 | 0.46 |
Based on the provided data for Shake Shack Inc, let's analyze the long-term activity ratios:
1. Fixed Asset Turnover:
- In 2020, the fixed asset turnover ratio was 0.81, indicating that the company generated $0.81 in revenue for every $1 of fixed assets invested.
- There was a significant improvement in the fixed asset turnover ratio in 2021, increasing to 1.90. This suggests that the company was more efficient in utilizing its fixed assets to generate sales.
- The ratio continued to improve slightly in 2022 and 2023, reaching 1.93 and remaining unchanged in 2024. This indicates a consistent and efficient utilization of fixed assets to generate revenue.
2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company is utilizing all its assets to generate revenue.
- In 2020, the total asset turnover ratio was 0.46, indicating that for every $1 of total assets, the company generated $0.46 in revenue.
- The ratio showed an increasing trend over the years, reaching 0.51 in 2021, 0.60 in 2022, 0.68 in 2023, and 0.74 in 2024. This indicates a positive trend of improving efficiency in utilizing all assets to generate sales.
Overall, the data suggests that Shake Shack Inc has been improving its efficiency in utilizing both fixed and total assets to generate revenue over the years. This improvement reflects positively on the company's operational performance and indicates effective asset management.