Texas Roadhouse, Inc. (TXRH) Balance Sheet

The asset base is expanding steadily, driven largely by a 27% increase in net PPE to $2.8B, reflecting continued restaurant build-out. However, the debt spike in 2025Q4 to $1.9B, though reduced by 2026Q2, suggests the company used leverage to fund that growth, which may pressure future cash flows if not managed.

The sharp increase in total debt during 2025Q4, from $854M to $1.9B, appears to be a strategic move to fund capex and possibly share repurchases, but it also elevated leverage temporarily. By 2026Q2, debt was reduced to $1.1B, but the D/E ratio remains above the 2024 levels, suggesting a higher ongoing debt load that could increase interest expense and reduce financial flexibility.

The balance sheet is dominated by property and equipment, consistent with a company-owned restaurant model that requires significant capital investment. The increase in goodwill from $169.7M to $275M over the past year suggests acquisitions or impairments that warrant scrutiny, as it may indicate overpayment or integration risks.

The doubling of equity over the period is largely attributable to retained earnings, which grew from $1.2B to $1.6B, reflecting consistent profitability. However, the jump in equity from $1.5B in 2026Q1 to $2.8B in 2026Q2 is unusually large and may be due to a share issuance or revaluation, which investors should investigate for potential dilution or accounting adjustments.

The current ratio has deteriorated significantly, now well below 1.0, suggesting that current liabilities exceed current assets, which could strain short-term obligations. Cash levels, though positive, are lower than in prior quarters, and the company may need to rely on operating cash flow or external financing to cover near-term liabilities, especially given the elevated debt levels.