Shake Shack Inc (SHAK)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.04 | 2.12 | 2.19 | 2.31 | 2.33 | 2.54 | 2.89 | 3.07 | 3.37 | 3.54 | 3.52 | 3.67 | 1.85 | 1.96 | 2.11 | 1.12 | 0.88 | 1.04 | 1.10 | 1.17 |
| Quick ratio | 1.89 | 1.96 | 2.06 | 2.15 | 2.20 | 2.41 | 2.76 | 2.94 | 3.26 | 3.49 | 3.47 | 3.58 | 1.76 | 1.91 | 2.06 | 1.08 | 0.84 | 1.00 | 1.01 | 1.12 |
| Cash ratio | 1.79 | 1.87 | 1.97 | 2.05 | 2.11 | 2.33 | 2.67 | 2.85 | 3.15 | 3.40 | 3.38 | 3.50 | 1.68 | 1.84 | 1.97 | 1.01 | 0.74 | 0.84 | 0.83 | 1.00 |
The liquidity ratios of Shake Shack Inc have shown generally positive trends over the periods analyzed. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has consistently been above 1, indicating that Shake Shack Inc has ample current assets to meet its short-term obligations. The current ratio has also been increasing, reaching a peak of 3.67 as of March 31, 2021, before declining slightly in the most recent periods.
The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, also demonstrates healthy levels above 1 throughout the periods analyzed. This ratio has followed a similar trend to the current ratio, indicating a strong ability to cover immediate liabilities with the most liquid assets.
The cash ratio, which is the most stringent liquidity measure as it considers only cash and cash equivalents, has also shown consistent levels well above 1. This suggests that Shake Shack Inc has a comfortable level of cash reserves to cover its short-term obligations without relying on selling inventory.
Overall, Shake Shack Inc's liquidity ratios reflect a strong financial position with ample liquidity to meet its short-term financial commitments. The slight declines in the ratios in the most recent periods should be monitored closely to ensure that the company's liquidity remains at healthy levels.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -5.41 | -8.51 | -5.05 | -4.61 | -8.91 | -7.60 | -7.02 | -4.62 | -11.44 | -11.16 | -23.07 | -25.54 | -24.55 | -21.09 | -14.94 | -8.55 | -4.58 | -3.43 | 5.54 | -7.48 |
The cash conversion cycle for Shake Shack Inc has fluctuated over the periods in consideration. The negative values of the cash conversion cycle indicate that the company is effectively managing its cash flow and operating cycle.
On a quarterly basis, the cash conversion cycle has shown a general trend of improvement from the end of 2019 to the end of 2023. This improvement suggests that Shake Shack Inc has been able to reduce the time it takes to convert its investments in inventory and accounts receivable into cash through sales.
The most recent cash conversion cycle figures show that Shake Shack Inc has continued to enhance its working capital management, with a reduction in the cycle duration. This trend is positive as it indicates efficient management of resources, potentially leading to improved liquidity and profitability.
Overall, the negative cash conversion cycle values suggest that Shake Shack Inc has been successful in managing its cash flow and operating cycle efficiently.