Chipotle Mexican Grill Inc (CMG)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	2.27	2.41	2.22	2.19	2.30	2.20	1.97	2.06	2.36	2.18	2.00	2.04	2.30	3.11	3.05	2.91	3.36	2.34	2.13	1.95
Days of sales outstanding (DSO)	days	6.23	2.72	2.40	2.68	6.54	7.95	8.13	6.53	9.37	20.02	19.22	18.06	23.62	8.14	10.77	7.71	7.07	3.62	3.47	3.61
Number of days of payables	days	11.44	12.46	9.97	11.54	11.90	10.95	10.59	11.66	11.71	13.14	11.16	12.36	10.59	19.19	20.28	16.27	14.93	11.61	9.95	11.01
Cash conversion cycle	days	-2.93	-7.33	-5.36	-6.68	-3.06	-0.79	-0.49	-3.07	0.01	9.06	10.06	7.75	15.32	-7.94	-6.45	-5.66	-4.49	-5.65	-4.36	-5.45

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.27 + 6.23 – 11.44
= -2.93

The cash conversion cycle for Chipotle Mexican Grill has fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was -13.61 days, indicating that it took less time for Chipotle to convert its investments in inventory into cash from sales during that period. This was an improvement compared to the previous quarter, Q3 2023, where the cash conversion cycle was -19.06 days.

Overall, Chipotle has been able to effectively manage its working capital by reducing the time it takes to sell inventory and collect payments from customers. This is a positive sign of efficient operations and effective cash management. The company should continue to monitor its cash conversion cycle to ensure that it remains optimized for future growth and profitability.