Texas Roadhouse Inc (TXRH)
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 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.48 | 0.32 | 0.41 | 0.46 | 0.61 | 0.54 | 0.53 | 0.79 | 0.94 | 1.21 | 1.21 | 1.14 | 1.01 | 1.01 | 0.89 | 0.97 | 0.59 | 0.50 | 0.61 | 0.89 |
| Quick ratio | 0.38 | 0.21 | 0.29 | 0.34 | 0.50 | 0.43 | 0.43 | 0.68 | 0.83 | 1.10 | 1.11 | 1.05 | 0.91 | 0.91 | 0.78 | 0.82 | 0.50 | 0.40 | 0.51 | 0.79 |
| Cash ratio | 0.14 | 0.12 | 0.19 | 0.27 | 0.27 | 0.36 | 0.34 | 0.60 | 0.56 | 0.98 | 1.01 | 0.98 | 0.72 | 0.83 | 0.70 | 0.74 | 0.26 | 0.30 | 0.40 | 0.70 |
Texas Roadhouse Inc's liquidity ratios have shown some volatility over the past few quarters. The current ratio, a measure of the company's ability to cover its short-term obligations with its current assets, has declined from 1.21 in June 2021 to 0.48 in December 2023. This downward trend indicates a potential strain on the company's liquidity position.
The quick ratio, which provides a more conservative view by excluding inventory from current assets, has also decreased over the same period, falling from 1.11 in June 2021 to 0.38 in December 2023. This suggests that Texas Roadhouse Inc may have difficulties meeting its short-term obligations without relying on inventory.
The cash ratio, focusing solely on the most liquid assets, paints a similar picture of declining liquidity. From March 2021 to December 2023, the cash ratio has dropped from 1.01 to 0.14, indicating a significant decrease in the company's ability to cover its short-term liabilities with cash and cash equivalents.
Overall, Texas Roadhouse Inc's liquidity ratios have weakened, raising concerns about its ability to meet its short-term financial obligations. Management should closely monitor and effectively manage the company's liquidity position to avoid potential liquidity challenges in the future.
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 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 5.64 | -4.15 | -2.65 | -3.87 | 6.80 | -1.52 | -1.67 | -2.53 | 9.42 | -9.22 | -13.71 | -15.86 | -0.41 | -10.74 | -9.00 | -3.86 | -0.32 | -9.58 | -10.91 | -16.06 |
The cash conversion cycle of Texas Roadhouse Inc fluctuated over the past five years, reflecting variations in the company's efficiency in managing its cash flows. The cycle measures the time it takes for the company to convert its investment in inventory into cash received from customers.
On average, the company's cash conversion cycle has been negative, indicating that Texas Roadhouse has been able to collect cash from customers before paying its suppliers and converting inventory into sales. The negative values suggest a relatively efficient working capital management strategy during these periods.
However, there were fluctuations in the cash conversion cycle, with some periods showing positive values. This indicates that there were instances when Texas Roadhouse took longer to convert its inventory into sales and receive cash from customers, leading to a build-up of working capital.
Overall, Texas Roadhouse's cash conversion cycle trended positively over the past few years, indicating that the company has been improving its efficiency in managing working capital and converting inventory into cash.