Shake Shack Inc (SHAK)
Cash ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 320,714 | 224,653 | 230,521 | 302,406 | 146,873 |
| Short-term investments | US$ in thousands | 0 | 68,561 | 80,707 | 80,000 | 36,887 |
| Total current liabilities | US$ in thousands | 187,313 | 164,067 | 147,718 | 121,497 | 109,705 |
| Cash ratio | 1.71 | 1.79 | 2.11 | 3.15 | 1.68 |
December 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($320,714K
+ $0K)
÷ $187,313K
= 1.71
The cash ratio of Shake Shack Inc has shown varying trends over the past five years. As of December 31, 2020, the cash ratio was at 1.68, indicating that the company had $1.68 in cash and cash equivalents for every $1 of current liabilities.
By the end of 2021, the cash ratio improved significantly to 3.15, suggesting that Shake Shack had increased its liquidity position substantially. This indicates a strong ability to cover short-term obligations with its available cash.
However, in 2022, the cash ratio decreased to 2.11, indicating a slight decline in liquidity compared to the previous year. Despite this decrease, the company still maintained a healthy level of cash reserves relative to its current liabilities.
In 2023, the cash ratio dropped further to 1.79, signaling a potential liquidity challenge for Shake Shack Inc. This could be a cause for concern as the company may have less cash on hand to meet its short-term financial obligations.
As of December 31, 2024, the cash ratio slightly improved to 1.71, but it still remains below the levels seen in 2021. It is essential for Shake Shack to closely monitor its liquidity position to ensure it can meet its financial commitments in a timely manner and weather any potential economic challenges that may arise.
Peer comparison
Dec 31, 2024