Shake Shack Inc (SHAK)
Quick ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash | 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 |
| Receivables | US$ in thousands | — | — | — | — | — |
| Total current liabilities | US$ in thousands | 187,313 | 164,067 | 147,718 | 121,497 | 109,705 |
| Quick ratio | 1.71 | 1.79 | 2.11 | 3.15 | 1.68 |
December 31, 2024 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($320,714K
+ $0K
+ $—K)
÷ $187,313K
= 1.71
The quick ratio of Shake Shack Inc has shown variability over the past five years. As of December 31, 2020, the quick ratio was 1.68, indicating that the company had $1.68 in liquid assets available to cover each dollar of current liabilities.
The ratio significantly improved to 3.15 by December 31, 2021, reflecting a strong liquidity position with more than enough liquid assets to cover short-term obligations. This may suggest efficient management of current assets and liabilities during that period.
However, the quick ratio decreased to 2.11 by December 31, 2022, and further to 1.79 by December 31, 2023. Although these ratios are above 1, indicating the company's ability to meet current liabilities with its quick assets, the decreasing trend may imply a potential decrease in liquidity or potential issues managing short-term obligations.
By December 31, 2024, the quick ratio slightly decreased to 1.71, which is still above 1 but lower compared to previous years. This may indicate that the company had a lower proportion of liquid assets relative to current liabilities during that period.
Overall, while Shake Shack Inc has generally maintained a quick ratio above 1, which is considered satisfactory, the fluctuation in the ratio over the years suggests a need for continuous monitoring of liquidity management and potential adjustments to ensure the company's ability to meet its short-term obligations effectively.
Peer comparison
Dec 31, 2024