Chipotle Mexican Grill Inc (CMG)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	147.04	160.46	158.73	154.97	158.94
Receivables turnover	53.57	58.59	55.84	38.97	15.45
Payables turnover	34.16	31.91	30.68	31.18	34.45
Working capital turnover	18.49	16.73	34.00	14.86	10.01

Based on the provided data, Chipotle Mexican Grill Inc's activity ratios exhibit interesting trends over the five-year period:

1. Inventory Turnover: Chipotle's inventory turnover has remained relatively stable, ranging from 147.04 to 160.46. This indicates that the company effectively manages its inventory levels, with a high turnover rate suggesting efficient inventory management.

2. Receivables Turnover: Chipotle's receivables turnover ratio has shown significant improvement over the years, increasing from 15.45 to 53.57. This indicates that the company is collecting its receivables more efficiently, possibly due to better credit policies or prompt customer payments.

3. Payables Turnover: Chipotle's payables turnover ratio has fluctuated slightly but has remained within a relatively narrow range of 30.68 to 34.45. This suggests that the company is effectively managing its payment cycles with suppliers, maintaining stable relationships and payment terms.

4. Working Capital Turnover: Chipotle's working capital turnover has shown fluctuating trends, with a peak in 2022 at 34.00 and a subsequent decline in the following years. This ratio indicates how efficiently the company generates revenue from its working capital, with higher values generally indicating better management of resources.

In summary, Chipotle Mexican Grill Inc's activity ratios demonstrate effective management of inventory, receivables, payables, and working capital over the five-year period, with some areas showing improvement and others maintaining stability.

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	2.48	2.27	2.30	2.36	2.30
Days of sales outstanding (DSO)	days	6.81	6.23	6.54	9.37	23.62
Number of days of payables	days	10.69	11.44	11.90	11.71	10.59

Chipotle Mexican Grill Inc's activity ratios indicate efficient management of its operational resources.

1. Days of Inventory on Hand (DOH): Chipotle maintains a relatively stable inventory turnover cycle, with DOH ranging from 2.27 to 2.48 days over the past five years. This suggests that the company effectively manages its inventory levels to support its operations and meet customer demand efficiently.

2. Days of Sales Outstanding (DSO): Chipotle has shown significant improvement in its collection efficiency, with DSO decreasing from 23.62 days in 2020 to 6.81 days in 2024. This indicates that the company is collecting revenue from its customers at a faster rate, resulting in better cash flow management and reduced credit risks.

3. Number of Days of Payables: Chipotle's payables turnover has been relatively consistent over the years, with the number of days of payables ranging from 10.59 to 11.90 days. This suggests that the company maintains a balanced approach in managing its vendor payments, ensuring good relationships with suppliers while optimizing cash flow.

Overall, Chipotle's activity ratios demonstrate a well-structured approach to managing its working capital and operational efficiency, leading to a healthy financial performance.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	4.73	4.55	4.43	4.27	3.78
Total asset turnover	1.23	1.23	1.25	1.13	1.00

The long-term activity ratios for Chipotle Mexican Grill Inc show a positive trend over the years.

1. Fixed Asset Turnover: This ratio measures how efficiently the company is utilizing its fixed assets to generate revenue. Chipotle's Fixed Asset Turnover has been consistently increasing from 3.78 in 2020 to 4.73 in 2024. This indicates that the company is becoming more efficient in using its fixed assets to generate sales.

2. Total Asset Turnover: Total Asset Turnover shows how well the company is utilizing all its assets to generate revenue. Chipotle's Total Asset Turnover increased from 1.00 in 2020 to 1.23 in 2024. Even though there was a slight dip in 2023, the overall trend is positive, indicating improved efficiency in generating revenue from its total assets.

Overall, the increase in both Fixed Asset Turnover and Total Asset Turnover ratios suggests that Chipotle Mexican Grill Inc is effectively managing its assets to drive sales growth and improve operational efficiency over the years.