Texas Roadhouse Inc (TXRH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 108.60 | 101.69 | 88.42 | 90.44 | 94.55 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | 553.45 |
Based on the provided activity ratios for Texas Roadhouse Inc:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently the company manages its inventory. Texas Roadhouse Inc's inventory turnover has been consistently high over the years, indicating that the company is effectively selling and restocking its inventory. The ratio decreased slightly from 94.55 in 2020 to 88.42 in 2022, but then saw an improvement in 2024 to 108.60. This suggests that the company is able to convert its inventory into sales at a fast pace.
2. Receivables Turnover:
- The receivables turnover ratio is not provided for Texas Roadhouse Inc for the years specified in the data. This ratio typically measures how well the company is collecting on its credit sales from customers. The absence of data may suggest that the company does not extend credit sales to customers or that the data is not available.
3. Payables Turnover:
- Similarly, the payables turnover ratio is not provided for Texas Roadhouse Inc for the years specified in the data. This ratio usually evaluates how efficiently a company pays its suppliers or vendors. The lack of data may indicate that the company's payment terms with suppliers are not significant or that the data is missing.
4. Working Capital Turnover:
- The working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales. Texas Roadhouse Inc had a working capital turnover of 553.45 in 2020, showcasing a high level of sales generated per unit of working capital. However, data for the subsequent years is absent, making it difficult to evaluate the trend in working capital efficiency beyond 2020.
In summary, based on the available data, Texas Roadhouse Inc demonstrates strong inventory turnover efficiency, while information on receivables turnover, payables turnover, and working capital turnover beyond 2020 is not provided, limiting a comprehensive analysis of the company's overall activity ratios.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.36 | 3.59 | 4.13 | 4.04 | 3.86 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios of Texas Roadhouse Inc over the past five years indicate the following trends:
1. Days of Inventory on Hand (DOH):
- The average number of days it takes for Texas Roadhouse to turn its inventory into sales has been relatively stable, ranging from 3.36 days to 4.13 days.
- A decreasing trend is observed from 2023 to 2024, implying that the company is managing its inventory more efficiently.
2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO) for any of the years, indicating that the company may not track this metric or it may not be applicable to their business model.
3. Number of Days of Payables:
- Similar to DSO, the data does not provide any information on the Number of Days of Payables for any of the years, suggesting that the company has not disclosed this metric or it may not be significant for their operations.
In summary, the analysis of Texas Roadhouse's activity ratios shows a stable trend in inventory turnover over the years, with a slight improvement in efficiency noted in the most recent year. However, the lack of information on DSO and payables limits a comprehensive assessment of the company's overall working capital management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.16 | 1.99 | 2.20 |
| Total asset turnover | 1.68 | 1.66 | 1.59 | 1.38 | 1.03 |
Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate revenue over time. In the case of Texas Roadhouse Inc, we analyze two long-term activity ratios: Fixed Asset Turnover and Total Asset Turnover.
1. Fixed Asset Turnover:
- In 2020, the Fixed Asset Turnover ratio was 2.20, indicating that Texas Roadhouse generated $2.20 in revenue for every dollar invested in fixed assets.
- By 2021, the ratio decreased to 1.99, suggesting a slight decline in the company's efficiency in utilizing its fixed assets to generate sales.
- There was a significant improvement in the ratio in 2022, as it increased to 3.16, showing that Texas Roadhouse became more efficient in generating revenue from its fixed assets. However, it is important to validate this figure as such a jump in one year could be an anomaly.
- Unfortunately, data for 2023 and 2024 are missing, making it challenging to assess the trend of the Fixed Asset Turnover ratio in the more recent years.
2. Total Asset Turnover:
- In 2020, the Total Asset Turnover ratio was 1.03, suggesting that Texas Roadhouse generated $1.03 in revenue for every dollar invested in total assets that year.
- The ratio improved significantly to 1.38 in 2021, indicating that the company became more effective in utilizing its total assets to generate sales.
- Subsequently, the ratio continued to increase to 1.59 in 2022, reaching higher levels of efficiency in generating revenue from its total assets.
- By 2023 and 2024, the Total Asset Turnover ratio further improved to 1.66 and 1.68, respectively, indicating ongoing efficiency in asset utilization for revenue generation.
Overall, based on the available data, Texas Roadhouse Inc has shown improvements in both Fixed Asset Turnover and Total Asset Turnover ratios over the analyzed period. It is essential for the company to maintain or enhance these ratios in the future to ensure sustainable growth and profitability.