Chipotle Mexican Grill Inc (CMG)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current ratio 1.57 1.28 1.58 1.73 1.61
Quick ratio 2.13 1.70 1.45 1.63 1.48
Cash ratio 1.97 1.53 1.23 1.16 1.32

Based on the provided data for Chipotle Mexican Grill's liquidity ratios from 2019 to 2023, we can observe some trends and fluctuations in the ratios:

1. Current Ratio:
- Chipotle's current ratio has varied over the past five years, ranging from 1.28 to 1.73.
- The current ratio measures the company's ability to meet its short-term obligations with its current assets.
- A higher current ratio is generally preferred as it indicates a better ability to cover short-term liabilities, and Chipotle's ratio has been above 1 across the years, showing a satisfactory level of liquidity.

2. Quick Ratio:
- Chipotle's quick ratio has also fluctuated within a range of 1.24 to 1.70 over the same period.
- The quick ratio, which excludes inventory from current assets, provides a more conservative measure of liquidity.
- Chipotle's quick ratio generally mirrors the trend of the current ratio, indicating consistent ability to meet short-term obligations even without relying heavily on inventory.

3. Cash Ratio:
- Chipotle's cash ratio has shown variability, ranging from 1.07 to 1.41 across the five years.
- The cash ratio focuses solely on the ability to cover short-term obligations with cash and cash equivalents.
- Chipotle has maintained a healthy cash ratio above 1 throughout the years, highlighting a sufficient level of cash reserves to meet immediate payment needs.

Overall, Chipotle Mexican Grill has demonstrated adequate liquidity levels over the years, as evidenced by its current, quick, and cash ratios consistently above 1. This suggests that the company has the ability to meet its short-term financial obligations effectively and has maintained a good balance of current assets to cover its current liabilities.


See also:

Chipotle Mexican Grill Inc Liquidity Ratios


Additional liquidity measure

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash conversion cycle days -2.93 -3.06 0.01 15.32 -1.23

Chipotle Mexican Grill's cash conversion cycle has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle was -13.61 days, indicating a slight improvement from the previous year. This negative value suggests that Chipotle is efficient in converting its inventory and accounts receivable into cash, requiring fewer days to do so than the average time it takes to pay its suppliers.

In 2022, the cash conversion cycle was -14.35 days, showing a slightly longer cycle compared to 2023. Despite this increase, the company still managed to convert its cash quickly overall. The year 2021 saw a further decrease in the cycle to -11.24 days, indicating an improvement in efficiency.

However, in 2020, there was a significant shift in the cash conversion cycle to a positive 5.58 days. This suggests a deviation from the trend seen in the previous years, with Chipotle taking longer to convert its operating cycle into cash during this period.

Similarly, in 2019, the cash conversion cycle was -10.65 days, indicating efficiency in managing cash flows, albeit not as pronounced as in some of the more recent years.

Overall, Chipotle Mexican Grill has shown varying performance in its cash conversion cycle over the analyzed period. It is essential for the company to maintain focus on managing its working capital effectively to ensure efficient cash flow operations in the future.