Shake Shack Inc (SHAK)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,252,610 | 1,087,530 | 900,486 | 739,893 | 522,867 |
| Total current assets | US$ in thousands | 368,216 | 334,432 | 343,988 | 409,676 | 203,186 |
| Total current liabilities | US$ in thousands | 187,313 | 164,067 | 147,718 | 121,497 | 109,705 |
| Working capital turnover | 6.92 | 6.38 | 4.59 | 2.57 | 5.59 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,252,610K ÷ ($368,216K – $187,313K)
= 6.92
The working capital turnover ratio for Shake Shack Inc has shown some fluctuations over the years. In 2020, the ratio stood at 5.59, indicating that the company was able to generate revenue 5.59 times for every dollar of working capital invested. However, this ratio decreased to 2.57 in 2021, suggesting a potential inefficiency in utilizing its working capital.
In the subsequent years, Shake Shack Inc demonstrated improvements in its working capital turnover ratio. By the end of 2022, the ratio had increased to 4.59, signifying an enhancement in the company's ability to generate revenue from its working capital. This positive trend continued in 2023 and 2024, with the working capital turnover ratios reaching 6.38 and 6.92, respectively. These higher ratios indicate that Shake Shack Inc was able to generate a significant amount of sales relative to its working capital investment, reflecting a more efficient utilization of resources.
Overall, the fluctuation in Shake Shack Inc's working capital turnover ratio highlights the company's evolving operational efficiency and effectiveness in managing its working capital to drive revenue generation.
Peer comparison
Dec 31, 2024