Shake Shack Inc (SHAK)
Financial leverage ratio
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 1,605,860 | 1,581,940 | 1,549,900 | 1,524,000 | 1,511,950 | 1,515,970 | 1,480,080 | 1,449,730 | 1,457,570 | 1,440,300 | 1,432,270 | 1,407,590 | 1,145,350 | 1,137,200 | 1,123,940 | 1,040,010 | 968,268 | 963,272 | 898,244 | 846,968 |
| Total stockholders’ equity | US$ in thousands | 443,417 | 433,442 | 423,359 | 412,506 | 412,204 | 417,700 | 402,765 | 400,415 | 409,537 | 416,862 | 417,073 | 413,933 | 407,321 | 417,692 | 421,578 | 300,418 | 298,817 | 290,616 | 255,020 | 236,439 |
| Financial leverage ratio | 3.62 | 3.65 | 3.66 | 3.69 | 3.67 | 3.63 | 3.67 | 3.62 | 3.56 | 3.46 | 3.43 | 3.40 | 2.81 | 2.72 | 2.67 | 3.46 | 3.24 | 3.31 | 3.52 | 3.58 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,605,860K ÷ $443,417K
= 3.62
The financial leverage ratio of Shake Shack Inc has shown fluctuations over the past few quarters. The ratio has been hovering around the range of 3.40 to 3.70, indicating that the company has been using debt as a significant source of financing relative to its equity.
In particular, the ratio peaked at 3.69 in March 2023 and has been relatively stable since then. This level of financial leverage suggests that Shake Shack Inc is relatively highly leveraged, with a significant portion of its assets financed by debt compared to equity.
It is important to note that a higher financial leverage ratio indicates higher financial risk due to the increased reliance on debt financing, which can lead to higher interest payments and potential financial instability in times of economic downturns. Therefore, investors and stakeholders should closely monitor Shake Shack Inc's debt levels and financial performance to assess its ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023