Chipotle Mexican Grill Inc (CMG)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	560,609	384,000	815,374	607,987	480,626
Short-term investments	US$ in thousands	1,469,680	1,030,270	260,945	343,616	400,156
Total current liabilities	US$ in thousands	1,030,620	921,880	873,682	822,199	666,593
Cash ratio		1.97	1.53	1.23	1.16	1.32

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($560,609K + $1,469,680K) ÷ $1,030,620K
= 1.97

The cash ratio of Chipotle Mexican Grill has fluctuated over the past five years, ranging from 1.07 to 1.41. The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a company has more liquid assets available to cover its short-term obligations.

In 2023, the cash ratio improved to 1.37, showing an increase in Chipotle's ability to cover its current liabilities with cash on hand compared to the previous year. This may suggest stronger liquidity and financial stability for the company in the most recent year.

However, it's important to consider the trend over multiple years to assess the overall financial health of the company. The fluctuations in the cash ratio over the years could be influenced by various factors such as changes in cash management practices, operating performance, or investment decisions.

Overall, a cash ratio above 1 indicates that Chipotle Mexican Grill has sufficient cash to cover its short-term obligations, reflecting its ability to meet immediate financial obligations without relying heavily on external financing.