Chipotle Mexican Grill Inc. (NYSE:CMG)

The financial metrics demonstrate generally positive trends over the observed period, with some fluctuations. Asset turnover, current ratio, debt ratios, financial leverage, and profitability metrics all exhibit discernible patterns. Adjustments to the reported figures generally result in moderate shifts, often amplifying existing trends or moderating volatility.

Asset Turnover

Both the reported and adjusted total asset turnover ratios show an initial increase from 2021 to 2022, followed by relative stability through 2024, and a further increase in 2025. The adjusted ratio consistently mirrors the reported ratio, suggesting that adjustments have a minimal impact on this metric. The increase in 2025 indicates improved efficiency in utilizing assets to generate sales.

Liquidity (Current Ratio)

The reported current ratio experiences volatility, decreasing from 2021 to 2022, increasing in 2023, slightly decreasing in 2024, and then declining again in 2025. The adjusted current ratio, however, demonstrates a more stable and generally higher value throughout the period. Adjustments appear to improve the perceived liquidity position. The difference between reported and adjusted values widens in later years, suggesting a growing impact from the adjustments.

Leverage (Debt to Equity & Debt to Capital)

The adjusted debt to equity ratio initially increases from 2021 to 2022, then decreases through 2024 before rising again in 2025. The adjusted debt to capital ratio remains relatively stable between 2021 and 2023, decreases slightly in 2024, and then increases in 2025. These trends suggest a fluctuating reliance on debt financing, with a potential increase in leverage in the most recent year. The adjustments moderate the debt to equity ratio, while the debt to capital ratio remains largely unaffected.

Financial Leverage

Reported financial leverage follows a similar pattern to debt ratios, initially increasing and then decreasing before rising again in 2025. The adjusted financial leverage mirrors this trend, though at slightly lower values. The increase in 2025 suggests a greater use of financial leverage to amplify returns, potentially increasing financial risk.

Profitability (Net Profit Margin, ROE, ROA)

The reported net profit margin consistently increases from 2021 to 2024, with a slight decrease in 2025, indicating improving profitability. The adjusted net profit margin follows a similar trajectory, consistently exceeding the reported margin. Both reported and adjusted return on equity (ROE) and return on assets (ROA) demonstrate strong positive trends, with substantial increases through 2024, followed by a slight moderation in 2025. Adjustments consistently increase both ROE and ROA, suggesting that the reported profitability metrics may underestimate the true performance of the company. The substantial increase in ROE in 2025 is particularly noteworthy.

Overall, the adjusted ratios generally present a more favorable financial picture than the reported ratios, particularly regarding liquidity and profitability. The trends suggest improving operational efficiency and profitability, although increasing leverage in the latest year warrants attention.

The adjusted total asset turnover ratio for the period demonstrates a generally stable performance with a slight upward trend. Revenue consistently increased year-over-year, while total assets experienced fluctuations. The adjusted figures show minimal difference from the reported values, suggesting the adjustments made did not significantly alter the overall assessment of asset utilization.

Adjusted Total Asset Turnover Trend

The adjusted total asset turnover ratio remained relatively consistent between 2021 and 2024, holding at 1.14 in 2021, 1.25 in 2022, and 1.23 in both 2023 and 2024. A noticeable increase to 1.33 is observed in 2025, indicating improved efficiency in asset utilization during that year.

Revenue Growth

Revenue exhibited a consistent upward trajectory throughout the observed period. From 7,575,662 in 2021, it rose to 11,927,399 in 2025. This sustained growth suggests increasing sales and market demand.

Asset Fluctuations

Adjusted total assets increased from 6,654,908 in 2021 to 8,047,104 in 2023, before decreasing slightly to 8,996,201 in 2025. The increase between 2021 and 2023 suggests investment in assets to support revenue growth, while the subsequent decrease in 2025 could indicate asset optimization or disposal.

Relationship between Revenue and Assets

The consistent revenue growth, coupled with the relatively stable asset base, contributed to the observed trend in the adjusted total asset turnover ratio. The increase in the ratio in 2025 suggests that the company generated more revenue per dollar of assets compared to previous years, potentially due to improved operational efficiency or a shift in asset composition.

The minor differences between reported and adjusted values indicate that the initial reporting did not materially misrepresent asset utilization. The overall trend suggests a healthy and improving ability to generate revenue from its asset base.

The adjusted current ratio exhibited fluctuations over the five-year period. Initially, the ratio demonstrated strength, followed by a period of decline, and then a subsequent recovery before concluding with another decrease. A review of the underlying components reveals insights into these movements.

Adjusted Current Ratio - Overall Trend

The adjusted current ratio began at 1.93 in 2021, decreased to 1.59 in 2022, increased to 1.98 in 2023, slightly decreased to 1.92 in 2024, and then decreased to 1.55 in 2025. This indicates a cyclical pattern of liquidity strength and weakness.

Adjusted Current Assets

Adjusted current assets increased from US$1,383,514 thousand in 2021 to US$1,623,455 thousand in 2023, representing a period of growth. This growth slowed in 2024, reaching US$1,783,540 thousand, and then decreased to US$1,468,623 thousand in 2025. The decrease in 2025 likely contributed to the decline in the adjusted current ratio observed in that year.

Adjusted Current Liabilities

Adjusted current liabilities consistently increased throughout the period, rising from US$717,331 thousand in 2021 to US$947,767 thousand in 2025. The rate of increase was not constant; it accelerated between 2022 and 2024. This consistent growth in liabilities placed upward pressure on the adjusted current ratio, partially offsetting the impact of changes in current assets.

Comparison to Reported Current Ratio

The adjusted current ratio consistently exceeded the reported current ratio across all years. The difference between the two ratios suggests that the adjustments made to current assets and liabilities provide a more favorable view of the company’s short-term liquidity position than the figures reported under standard accounting practices. The reported current ratio showed a more pronounced decline from 2021 to 2022 and a lower peak in 2023 compared to the adjusted ratio.

The fluctuations in the adjusted current ratio appear to be driven by a combination of changes in both adjusted current assets and adjusted current liabilities. While current liabilities consistently increased, the growth in current assets was not sustained, leading to the observed cyclical pattern in the ratio. The adjustments made to the current assets and liabilities appear to significantly impact the assessment of short-term liquidity.

The adjusted debt to equity ratio exhibits fluctuations over the observed period. Initial values indicate a decreasing trend followed by an increase in the most recent year presented. Shareholders’ equity demonstrates an overall increase from 2021 to 2024, with a subsequent decrease in 2025. Adjusted total debt consistently increased throughout the period.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio began at 1.36 in 2021, increased to 1.41 in 2022, then decreased to 1.20 in 2023 and further to 1.15 in 2024. A notable increase is observed in 2025, with the ratio rising to 1.59. This suggests a growing reliance on debt financing relative to equity in the latest year.

Shareholders’ Equity

Shareholders’ equity increased from US$2,297,374 thousand in 2021 to US$2,368,023 thousand in 2022. Further growth occurred, reaching US$3,062,207 thousand in 2023 and US$3,655,546 thousand in 2024. However, a decrease to US$2,830,607 thousand is evident in 2025. This decrease could be attributable to share repurchases, dividend payouts, or net losses.

Adjusted Total Debt

Adjusted total debt consistently increased throughout the period, moving from US$3,520,314 thousand in 2021 to US$3,731,410 thousand in 2022, US$4,051,625 thousand in 2023, US$4,540,618 thousand in 2024, and finally to US$5,075,814 thousand in 2025. This continuous increase in debt, coupled with the 2025 decrease in equity, contributes to the higher adjusted debt to equity ratio observed in that year.

Relationship between Debt and Equity

The initial decline in the adjusted debt to equity ratio from 2021 to 2024 coincided with faster growth in adjusted shareholders’ equity compared to adjusted total debt. However, the 2025 figures indicate a shift, with debt increasing at a faster rate than equity, resulting in a higher ratio. This suggests a potential increase in financial leverage and associated risk.

The adjusted debt to capital ratio exhibits a generally stable pattern with some fluctuation over the observed period. Initial values indicate a ratio of 0.58 in both 2021 and 2022. A slight decrease is then noted in 2023 and 2024, falling to 0.55 and 0.54 respectively. The most recent year, 2025, shows an increase to 0.61.

Adjusted Total Debt

Adjusted total debt demonstrates a consistent upward trend throughout the period. Starting at US$3,520,314 thousand in 2021, it increases to US$5,075,814 thousand in 2025. The year-over-year increases are relatively consistent, suggesting a deliberate strategy of increasing debt financing.

Adjusted Total Capital

Adjusted total capital also generally increases over the period, though with more variability. It rises from US$6,117,754 thousand in 2021 to US$8,483,902 thousand in 2024, before decreasing to US$8,274,140 thousand in 2025. The decline in 2025 is the first observed decrease in this metric, potentially indicating a shift in capital structure or a reduction in equity.

The interplay between the increasing adjusted total debt and the fluctuating adjusted total capital results in the observed pattern of the adjusted debt to capital ratio. The initial stability is maintained as both debt and capital increase at similar rates. The subsequent decrease in the ratio in 2023 and 2024 is driven by a faster growth rate in adjusted total capital compared to adjusted total debt. Finally, the increase in 2025 is attributable to the larger increase in adjusted total debt coupled with a slight decrease in adjusted total capital.

Ratio Trend

The ratio’s movement from 0.58 to 0.61 suggests a gradual increase in financial leverage. While the ratio remains within a relatively narrow range, the 2025 value represents the highest level of adjusted debt relative to adjusted capital during the analyzed timeframe. This warrants further investigation into the reasons behind the increased debt and its potential impact on financial risk.

An examination of the financial information reveals trends in adjusted financial leverage over a five-year period. Total assets generally increased from 2021 to 2024, peaking at US$9,204,374 thousand, before experiencing a slight decrease in 2025 to US$8,994,531 thousand. Shareholders’ equity followed a similar pattern, rising from US$2,297,374 thousand in 2021 to US$3,655,546 thousand in 2024, and then decreasing to US$2,830,607 thousand in 2025.

Reported Financial Leverage

Reported financial leverage initially stood at 2.90 in 2021, increasing slightly to 2.93 in 2022. Subsequently, it decreased to 2.63 in 2023 and 2.52 in 2024, before rising again to 3.18 in 2025. This indicates a fluctuating reliance on financial leverage as measured by the reported figures.

Adjusted Total Assets

Adjusted total assets mirrored the trend of total assets, increasing from US$6,654,908 thousand in 2021 to US$9,207,327 thousand in 2024, and then decreasing to US$8,996,201 thousand in 2025. The adjusted figures are consistently close to the reported total assets.

Adjusted Shareholders’ Equity

Adjusted shareholders’ equity also exhibited a similar pattern to shareholders’ equity, growing from US$2,597,440 thousand in 2021 to US$3,943,284 thousand in 2024, and then declining to US$3,198,326 thousand in 2025. The adjustments appear to consistently increase the reported equity value.

Adjusted Financial Leverage

Adjusted financial leverage decreased from 2.56 in 2021 to 2.33 in 2024, suggesting a decreasing reliance on financial leverage when equity is adjusted. However, it increased to 2.81 in 2025. The adjusted leverage ratio consistently remains lower than the reported leverage ratio across all observed periods, indicating that the adjustments reduce the calculated leverage. The most substantial decrease in adjusted leverage occurred between 2021 and 2024, followed by a moderate increase in 2025.

The decrease in both reported and adjusted financial leverage from 2021 to 2024 suggests improved solvency or a shift in capital structure. The subsequent increase in both measures in 2025 warrants further investigation to determine the underlying causes. The consistent difference between reported and adjusted leverage highlights the impact of the adjustments made to shareholders’ equity.

The adjusted net profit margin exhibited a consistent upward trend from 2021 through 2025. This indicates improving profitability when considering adjustments made to net income and revenue. While the reported net profit margin also increased over the period, the adjusted metric consistently presented a slightly higher value, suggesting the adjustments positively impact the profitability picture.

Adjusted Net Profit Margin Trend

In 2021, the adjusted net profit margin stood at 8.82%. It increased to 10.15% in 2022, representing a gain of 1.33 percentage points. Further increases were observed in subsequent years, reaching 12.61% in 2023, 13.37% in 2024, and culminating in 13.57% in 2025. The rate of increase slowed between 2023 and 2025, with a smaller gain of 0.96 percentage points compared to the 2.22 percentage point increase between 2022 and 2023.

Comparison with Reported Net Profit Margin

The adjusted net profit margin consistently exceeded the reported net profit margin across all observed years. The difference between the two metrics remained relatively stable, generally ranging between 0.17 and 0.72 percentage points. This suggests that the adjustments applied to net income and revenue consistently contribute to a more favorable profitability assessment.

Revenue and Net Income Relationship

Both adjusted revenue and adjusted net income increased year-over-year from 2021 to 2025. The growth in adjusted net income generally kept pace with the growth in adjusted revenue, contributing to the observed increase in the adjusted net profit margin. However, the increase in adjusted net income was slightly lower in 2025 than in 2024, which may explain the smaller increase in the adjusted net profit margin during that period.

Overall, the financial information indicates a strengthening profitability profile, as evidenced by the consistent rise in the adjusted net profit margin. The adjustments made to net income and revenue appear to provide a more comprehensive view of the company’s underlying profitability.

The period between 2021 and 2025 demonstrates a generally increasing trend in both net income and shareholders’ equity. However, the adjusted figures reveal some differences in the magnitude and consistency of these increases. A detailed examination of the adjusted return on equity (ROE) reveals specific patterns worthy of note.

Net Income and Adjusted Net Income

Net income increased consistently from US$652,984 thousand in 2021 to US$1,535,761 thousand in 2025. The adjusted net income followed a similar trajectory, starting at US$668,465 thousand in 2021 and reaching US$1,618,752 thousand in 2025. The difference between reported and adjusted net income remained relatively small throughout the period, suggesting that adjustments did not materially alter overall profitability.

Shareholders’ Equity and Adjusted Shareholders’ Equity

Shareholders’ equity also exhibited an overall upward trend, rising from US$2,297,374 thousand in 2021 to US$2,830,607 thousand in 2025. However, the increase was not linear, with a noticeable deceleration in growth between 2024 and 2025. Adjusted shareholders’ equity showed a similar pattern, beginning at US$2,597,440 thousand in 2021 and ending at US$3,198,326 thousand in 2025. The adjustments to shareholders’ equity resulted in consistently higher values compared to the reported equity, indicating that certain items were reclassified or revalued.

Reported Return on Equity (ROE)

Reported ROE increased steadily from 28.42% in 2021 to 54.26% in 2025. This indicates a growing ability to generate profit from shareholder investments. The most significant increase occurred between 2024 and 2025, with a substantial jump from 41.97% to 54.26%.

Adjusted Return on Equity (ROE)

Adjusted ROE also demonstrated an increasing trend, moving from 25.74% in 2021 to 50.61% in 2025. While the direction was consistent with the reported ROE, the adjusted values were consistently lower. The largest increase in adjusted ROE also occurred between 2024 and 2025, rising from 38.46% to 50.61%. The difference between reported and adjusted ROE narrowed over the period, although the adjusted ROE consistently remained below the reported ROE. This suggests that the adjustments to net income and shareholders’ equity have a combined dampening effect on the calculated return.

In summary, both reported and adjusted ROE show positive trends, indicating improving profitability relative to shareholder equity. However, the adjustments consistently result in a lower ROE, suggesting that the reported financial performance is somewhat overstated when considering these adjustments. The accelerated growth in both reported and adjusted ROE between 2024 and 2025 warrants further investigation to understand the underlying drivers of this improvement.

The reported and adjusted return on assets (ROA) for the analyzed period demonstrate a consistent upward trend. While both metrics show improvement, a comparison reveals subtle differences in the magnitude of change. Net income and total assets both increased over the five-year period, contributing to the overall positive ROA trend.

Reported ROA Trend

Reported ROA increased from 9.81% in 2021 to 17.07% in 2025. The largest single-year increase occurred between 2022 and 2023, moving from 12.98% to 15.27%. Growth moderated in subsequent years, with increases of 1.40% (2023-2024) and 0.70% (2024-2025). This suggests a potential slowing in the rate of ROA improvement despite continued growth in net income.

Adjusted ROA Trend

Adjusted ROA also exhibited an upward trajectory, rising from 10.04% in 2021 to 17.99% in 2025. Similar to the reported ROA, the most substantial increase was observed between 2022 and 2023, with a change from 12.69% to 15.52%. The adjusted ROA consistently exceeded the reported ROA across all analyzed years, indicating that the adjustments made to net income and total assets resulted in a higher profitability measure. The increase from 2024 to 2025 was 1.52%, slightly higher than the reported ROA increase over the same period.

Comparison of Reported and Adjusted ROA

The difference between reported and adjusted ROA remained relatively stable throughout the period, generally ranging between 0.23% and 0.92%. This consistency suggests that the adjustments applied are systematically impacting the ROA calculation and are not subject to significant year-over-year volatility. The adjustments appear to positively influence the ROA, consistently presenting a more favorable profitability picture.

Asset and Net Income Influence

Total assets increased steadily from US$6,652,958 thousand in 2021 to US$8,994,531 thousand in 2025. Net income also demonstrated substantial growth, rising from US$652,984 thousand to US$1,535,761 thousand over the same period. The combined effect of increasing net income and expanding asset base drove the observed improvements in both reported and adjusted ROA. The rate of asset growth appears to be slightly lower than the rate of net income growth, which contributes to the increasing ROA.