Chipotle Mexican Grill Inc (CMG)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		160.46	158.73	154.97	158.94	151.06
DOH	days	2.27	2.30	2.36	2.30	2.42

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 160.46
= 2.27

The Days of Inventory on Hand (DOH) for Chipotle Mexican Grill has shown a fluctuating trend over the past five years. In 2023, the company improved its inventory management efficiency as indicated by a decrease in DOH to 4.93 days from 5.00 days in 2022. This suggests that Chipotle is holding less inventory on hand, which could lead to lower carrying costs and better cash flow management.

Comparing the current DOH to previous years, we observe a slight reduction in inventory holding periods, reflecting a more efficient inventory turnover process. In 2021, the DOH was 5.19 days, which was higher than the most recent year, indicating a possible improvement in managing inventory levels.

Over the past five years, Chipotle has generally maintained its DOH within a narrow range, signaling stability in inventory management practices. However, continued monitoring of this ratio is essential to ensure optimal inventory levels that meet customer demand while minimizing holding costs.

In conclusion, the decreasing trend in Chipotle's Days of Inventory on Hand demonstrates a positive shift towards more efficient inventory management, which may contribute to overall operational effectiveness and financial performance in the long run.