Chipotle Mexican Grill Inc (CMG)

Cash ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash and cash equivalents	US$ in thousands	748,537	560,609	384,000	815,374	607,987
Short-term investments	US$ in thousands	1,348,760	1,469,680	1,030,270	260,945	343,616
Total current liabilities	US$ in thousands	1,168,770	1,030,620	921,880	873,682	822,199
Cash ratio		1.79	1.97	1.53	1.23	1.16

December 31, 2024 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($748,537K + $1,348,760K) ÷ $1,168,770K
= 1.79

The cash ratio of Chipotle Mexican Grill Inc has shown a consistent increase over the years, indicating a strengthening liquidity position. As of December 31, 2020, the cash ratio was 1.16, implying that the company had $1.16 in cash and cash equivalents for every dollar of current liabilities. This ratio improved to 1.23 by the end of 2021 and continued to rise in the following years, reaching 1.79 by December 31, 2024.

A cash ratio above 1 indicates that Chipotle Mexican Grill Inc has sufficient liquid assets to cover its short-term obligations. The steady increase in the cash ratio suggests that the company has been effectively managing its liquidity and strengthening its financial position over the years. However, it is important to note that a very high cash ratio may also indicate that the company is holding excess cash that could be deployed more efficiently for growth or investment opportunities.