Shake Shack Inc (SHAK)
Current ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| 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 |
| Current ratio | 2.04 | 2.33 | 3.37 | 1.85 | 0.88 |
December 31, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $334,432K ÷ $164,067K
= 2.04
The current ratio of Shake Shack Inc has shown fluctuating trends over the past five years. As of December 31, 2023, the current ratio stands at 2.04, indicating that the company's current assets are double its current liabilities, suggesting a healthy liquidity position.
Compared to the prior year-end in 2022, where the current ratio was 2.33, there has been a slight decrease. However, the current ratio remains above 2, which is generally considered a favorable level reflecting the company's ability to meet its short-term obligations.
In 2021, the current ratio significantly increased to 3.37, showcasing a substantial improvement in liquidity compared to the previous years. This indicates a strong ability to cover short-term liabilities with current assets.
In 2020, the current ratio was 1.85, which, although above 1, suggests a relatively weaker liquidity position compared to the subsequent years.
Moreover, in 2019, the company had a current ratio of 0.88, indicating that its current liabilities were higher than its current assets, which could be a cause for concern regarding the company's ability to meet its short-term obligations.
In conclusion, the current ratio of Shake Shack Inc has shown variability over the years, with the current ratio improving significantly in 2021 and slightly decreasing in 2023. Overall, a current ratio above 2 reflects a reasonably robust liquidity position, although investors and stakeholders should monitor changes in the ratio to assess the company's short-term solvency.
Peer comparison
Dec 31, 2023