Texas Roadhouse Inc (TXRH)

Short-term

Turnover ratios

Texas Roadhouse Inc has shown consistent improvement in its inventory turnover ratio over the past five years, increasing from 55.32 in 2019 to 108.45 in 2023. This indicates that the company is managing its inventory efficiently and turning it over at a faster rate.

The receivables turnover ratio has been relatively stable, ranging between 21.45 and 27.70 over the same period. This suggests that Texas Roadhouse is collecting its receivables in a timely manner.

The payables turnover ratio has also shown consistency, fluctuating between 15.78 and 33.96. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can be beneficial in managing cash flow.

Interestingly, the working capital turnover ratio is not available for the earlier years, but it was significantly high at 552.66 in 2020. This implies that the company is efficiently utilizing its working capital to generate sales.

Overall, Texas Roadhouse Inc demonstrates strong performance in managing its activity ratios, which reflects effective operational efficiency and management of resources.

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Average number of days

Texas Roadhouse Inc's activity ratios show the efficiency of the company in managing its inventory, collecting receivables, and paying its payables.

1. Days of Inventory on Hand (DOH): The company has improved its inventory management over the years, with DOH decreasing from 7.72 days in 2020 to 3.37 days in 2023. A lower DOH indicates that the company is selling inventory quickly, which can lead to higher inventory turnover and reduced carrying costs.

2. Days of Sales Outstanding (DSO): DSO measures how quickly the company collects its receivables. Texas Roadhouse Inc has maintained a relatively stable DSO over the years, ranging from 13.18 days in 2019 to 17.02 days in 2021. A lower DSO is favorable as it indicates faster cash collection and efficient credit management.

3. Number of Days of Payables: This ratio reflects how long the company takes to pay its suppliers. The trend in Texas Roadhouse Inc's payables days shows a slight increase from 20.07 days in 2019 to 11.56 days in 2023. A longer payment period can indicate better cash flow management and potentially improved supplier relationships.

Overall, Texas Roadhouse Inc has shown improvement in its activity ratios, suggesting better efficiency in managing its working capital components. However, further analysis is recommended to understand the impact of these ratios on the company's overall financial performance and liquidity.

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Long-term

Texas Roadhouse Inc has shown fluctuations in its long-term activity ratios over the past five years. The fixed asset turnover ratio, which measures how efficiently the company generates sales from its fixed assets, has generally been stable between 2.20 and 3.16. This indicates that the company has been effectively utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio, which measures the company's ability to generate sales from all its assets, has shown more variability over the same period, ranging from 1.03 to 1.66. This suggests that Texas Roadhouse Inc has been less consistent in converting all its assets, both fixed and current, into revenue.

Overall, the company's performance in terms of long-term activity ratios demonstrates a strong efficiency in utilizing fixed assets to generate sales, although there is room for improvement in maximizing the utilization of all assets to enhance revenue generation.