Chipotle Mexican Grill Inc (CMG)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	9,871,650	8,634,650	7,547,060	5,984,630	5,586,370
Total current assets	US$ in thousands	1,620,710	1,175,840	1,381,560	1,420,240	1,072,200
Total current liabilities	US$ in thousands	1,030,620	921,880	873,682	822,199	666,593
Working capital turnover		16.73	34.00	14.86	10.01	13.77

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,871,650K ÷ ($1,620,710K – $1,030,620K)
= 16.73

Chipotle Mexican Grill demonstrated varying levels of efficiency in managing its working capital turnover over the past five years. The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales revenue. In 2023, Chipotle's working capital turnover ratio decreased to 16.73 from 34.00 in 2022, indicating a decline in efficiency in converting working capital into sales. This decrease may be attributed to changes in the company's operating cycle or management of current assets and liabilities.

Comparing the 2023 ratio to earlier years, it still remains relatively high, suggesting that Chipotle has historically been efficient in utilizing its working capital to drive sales. The significant fluctuations in the working capital turnover ratio over the years, such as the notable increase in 2022 and subsequent decrease in 2023, may reflect changes in the company's business operations, financial policies, or market conditions.

It is essential for investors and stakeholders to closely monitor changes in the working capital turnover ratio to assess Chipotle's liquidity management and operational efficiency in the future. Additional analysis and comparison with industry benchmarks could provide further insights into Chipotle's financial performance and strategic decision-making processes.