Chipotle Mexican Grill Inc (CMG)

Quick ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash	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
Receivables	US$ in thousands	168,495	154,621	193,663	387,283	108,250
Total current liabilities	US$ in thousands	1,030,620	921,880	873,682	822,199	666,593
Quick ratio		2.13	1.70	1.45	1.63	1.48

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($560,609K + $1,469,680K + $168,495K) ÷ $1,030,620K
= 2.13

The quick ratio, also known as the acid-test ratio, measures Chipotle Mexican Grill's ability to cover its short-term liabilities with its most liquid assets. A quick ratio above 1 indicates that the company can meet its short-term obligations using its readily available assets.

Looking at the trend in Chipotle's quick ratio over the past five years, we observe fluctuations. In 2023, the quick ratio was 1.53, which represents an improvement compared to the previous year's 1.24. This increase suggests that Chipotle had a stronger ability to cover its short-term obligations with its liquid assets in 2023.

However, the quick ratio for 2023 is lower than the ratios for 2020 and 2021, which were 1.70 and 1.54, respectively. This indicates a potential decrease in Chipotle's liquidity position compared to those years. Nevertheless, a quick ratio of 1.53 is still considered healthy and shows that Chipotle remains able to meet its short-term liabilities in 2023.

Overall, while there have been fluctuations in Chipotle's quick ratio over the past five years, the company has generally maintained a strong ability to cover its short-term obligations with its liquid assets, which is a positive indicator of its financial health.