Texas Roadhouse Inc (TXRH)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.62 | 0.49 | 0.52 | 0.50 | 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 |
| Quick ratio | 0.30 | 0.30 | 0.31 | 0.31 | 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 |
| Cash ratio | 0.30 | 0.30 | 0.31 | 0.31 | 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 |
The current ratio of Texas Roadhouse Inc has shown fluctuations over the years, ranging from a low of 0.32 on September 30, 2023, to a high of 1.21 on June 30, 2021, before declining to 0.49 on September 30, 2024. Generally, a current ratio below 1 may indicate potential liquidity issues, as current liabilities exceed current assets. However, the current ratio improved towards the end of 2024 to 0.62, reflecting a slight increase in short-term liquidity.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, also exhibited variability. The quick ratio reached its highest point of 1.01 on June 30, 2021, but decreased to 0.12 on September 30, 2023, reflecting potential challenges in meeting short-term obligations without relying on inventory liquidation. The quick ratio improved to 0.30 by December 31, 2024.
The cash ratio, a more conservative measure of liquidity that focuses solely on cash and cash equivalents, mirrored the trends seen in the quick ratio, with fluctuations ranging from 0.19 on June 30, 2023, to 1.01 on June 30, 2021. The cash ratio improved to 0.30 by December 31, 2024.
In summary, while the liquidity ratios of Texas Roadhouse Inc have shown variability over the years, with some periods of potential liquidity strain, there are signs of improvement towards the end of 2024. Continued monitoring of these ratios would be essential to assess the company's ability to meet its short-term obligations.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 3.36 | 3.41 | 3.62 | 3.47 | 3.55 | 3.54 | 3.77 | 3.74 | 4.05 | 3.62 | 3.65 | 3.62 | 4.04 | 3.82 | 3.79 | 3.89 | 3.86 | 3.36 | 3.90 | 3.27 |
Texas Roadhouse Inc's cash conversion cycle has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales.
The data reveals that the company's cash conversion cycle ranged from a low of 3.27 days on March 31, 2020, to a high of 4.05 days on December 31, 2022. Generally, a shorter cash conversion cycle is favorable as it indicates that the company is able to efficiently manage its working capital and turn inventory into cash quickly.
Analyzing the trend, we observe that the cycle peaked in late 2022 before decreasing slightly by the end of 2024. It's important to note that a longer cash conversion cycle can suggest inefficiencies in inventory management, collection of receivables, or payment to suppliers.
Overall, Texas Roadhouse Inc should continue to monitor and work on optimizing its cash conversion cycle to ensure efficient cash flow management, improve liquidity, and enhance overall financial performance.