Shake Shack Inc (SHAK)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 23, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 556,706 | 453,759 | 435,756 | 421,363 | 406,744 | 383,216 | 370,502 | 347,911 | 322,797 | 305,012 | 277,865 | 249,221 | 240,994 | 274,204 | 326,866 | 382,237 | 411,991 | 391,218 | 364,010 | 337,771 |
| Payables | US$ in thousands | 22,273 | 21,251 | 17,005 | 16,002 | 20,407 | 17,210 | 16,420 | 13,395 | 19,947 | 17,841 | 26,292 | 24,307 | 23,487 | 22,354 | 20,735 | 15,330 | 14,300 | 15,865 | 3,828 | 12,655 |
| Payables turnover | 24.99 | 21.35 | 25.63 | 26.33 | 19.93 | 22.27 | 22.56 | 25.97 | 16.18 | 17.10 | 10.57 | 10.25 | 10.26 | 12.27 | 15.76 | 24.93 | 28.81 | 24.66 | 95.09 | 26.69 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $556,706K ÷ $22,273K
= 24.99
The payables turnover ratio indicates how efficiently Shake Shack Inc is managing its trade payables by measuring the number of times the company pays off its suppliers within a specific period. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which may be beneficial in terms of managing working capital effectively.
Based on the data provided, the payables turnover ratio for Shake Shack Inc has been fluctuating over the past few quarters. The ratio peaked at 95.09 in the first quarter of 2019 and has since shown some variability but generally remained at relatively high levels. This indicates a consistent ability to pay off trade payables efficiently.
It's important to note that a very high payables turnover ratio (like the one observed in Q1 2019) may also indicate a risk of straining supplier relationships if the company is paying too quickly. Conversely, a very low ratio could suggest liquidity issues or inefficiencies in payables management.
Overall, the increasing trend in the payables turnover ratio for Shake Shack Inc demonstrates a proactive approach to managing supplier payments, which can positively impact the company's working capital management and financial health.
Peer comparison
Dec 31, 2023