Chipotle Mexican Grill Inc (CMG)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	560,609	602,307	504,866	409,727	384,000	366,623	520,933	615,863	815,374	721,109	668,269	694,776	607,987	662,401	605,622	500,315	480,626	386,565	299,913	277,661
Short-term investments	US$ in thousands	1,469,680	1,703,400	1,702,280	1,305,720	1,030,270	417,278	240,684	240,379	260,945	301,534	322,460	363,585	343,616	342,819	301,041	380,978	400,156	428,796	417,867	457,363
Total current liabilities	US$ in thousands	1,030,620	1,087,710	982,250	894,092	921,880	817,857	831,623	833,738	873,682	850,964	835,486	834,004	822,199	801,717	723,178	665,795	666,593	634,019	548,268	581,667
Cash ratio		1.97	2.12	2.25	1.92	1.53	0.96	0.92	1.03	1.23	1.20	1.19	1.27	1.16	1.25	1.25	1.32	1.32	1.29	1.31	1.26

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 measures a company's ability to cover its short-term obligations using only its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet these obligations without relying on external sources of funding.

Analyzing Chipotle Mexican Grill's cash ratio from Q4 2022 to Q4 2023, we observe an increasing trend, starting at 1.07 in Q4 2022 and gradually rising to 1.37 in Q4 2023. This progression suggests an improvement in the company's liquidity position over the period.

Although the cash ratio fluctuated slightly in the subsequent quarters of 2023, ranging from 1.30 to 1.49, the values consistently remained above 1.00. This implies that Chipotle Mexican Grill had sufficient liquid assets to cover its short-term obligations throughout the year.

Overall, the upward trend in Chipotle Mexican Grill's cash ratio indicates an enhanced ability to meet its short-term financial commitments using available cash resources. This could signify effective cash management practices or improved profitability, contributing to the company's financial stability and resilience against unexpected cash flow fluctuations.