Shake Shack Inc (SHAK)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,085,860 | 897,418 | 736,703 | 512,280 | 594,193 |
| Total current assets | US$ in thousands | 334,432 | 343,988 | 409,676 | 203,186 | 87,675 |
| Total current liabilities | US$ in thousands | 164,067 | 147,718 | 121,497 | 109,705 | 99,392 |
| Working capital turnover | 6.37 | 4.57 | 2.56 | 5.48 | — |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,085,860K ÷ ($334,432K – $164,067K)
= 6.37
The working capital turnover of Shake Shack Inc has shown fluctuations over the past five years. The ratio has increased from 2.56 in 2021 to 6.37 in 2023, indicating a significant improvement in how efficiently the company is utilizing its working capital to generate revenue. This suggests that Shake Shack has been able to generate more revenue relative to its working capital investment in the most recent year.
It is important to note that a higher working capital turnover ratio is generally favorable as it indicates that the company is efficiently managing its working capital to support its sales activities. The increasing trend in Shake Shack's working capital turnover ratio over the years is a positive signal of the company's operational efficiency in using its working capital resources. This can be seen as a good sign of the company's ability to generate sales and revenue using its current assets more effectively.
Overall, the trend in Shake Shack Inc's working capital turnover ratio suggests improvements in the company's working capital management efficiency, which can positively impact its overall financial performance and profitability.
Peer comparison
Dec 31, 2023