Chipotle Mexican Grill Inc (CMG)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	7,196,630	6,307,620	5,661,730	5,087,090	4,203,080
Payables	US$ in thousands	210,695	197,646	184,566	163,161	121,990
Payables turnover		34.16	31.91	30.68	31.18	34.45

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $7,196,630K ÷ $210,695K
= 34.16

The payables turnover ratio measures how efficiently Chipotle Mexican Grill Inc is managing its payments to suppliers. The trend of Chipotle's payables turnover is as follows:

- In December 2020, the payables turnover ratio was 34.45, indicating that the company converted its accounts payable into cash 34.45 times during the year.
- By December 2021, the payables turnover decreased to 31.18, suggesting a slight decrease in the speed at which Chipotle was paying its suppliers.
- The trend continued with a further decline to 30.68 by December 2022, indicating a slower turnover of payables compared to the prior year.
- In December 2023, the payables turnover ratio improved to 31.91, hinting at a more efficient management of supplier payments.
- Finally, by December 2024, the payables turnover ratio increased to 34.16, showing that Chipotle was able to more effectively convert its accounts payable into cash.

Overall, the fluctuation in Chipotle's payables turnover ratio indicates varying levels of efficiency in managing supplier payments over the years, with improvements seen in recent periods. It is essential for Chipotle to strike a balance in managing payables to maintain good relationships with suppliers while optimizing cash flow.