Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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Chipotle Mexican Grill Inc. pages available for free this week:
- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Economic Profit
Chipotle Mexican Grill Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial data reveals several significant trends over the examined period, focusing on profitability, capital efficiency, and value creation.
- Net Operating Profit After Taxes (NOPAT)
-
NOPAT has exhibited a consistently strong upward trajectory from 2020 through 2024. Starting at approximately 614 million US dollars in 2020, it increased notably each year, reaching over 1.7 billion US dollars by 2024. This steady growth indicates improved operating performance and effective management of operating expenses and revenues over the five-year span.
- Cost of Capital
-
The cost of capital has remained relatively stable, fluctuating slightly but staying within a narrow range around 16.5% to 16.9%. This stability suggests a consistent assessment of risk and return expectations by the market or the company’s financing mix, without substantial volatility in the company’s risk profile or capital structure during these years.
- Invested Capital
-
Invested capital demonstrated growth overall, increasing from approximately 4.9 billion US dollars in 2020 to nearly 6.8 billion US dollars in 2024. There was a slight dip in 2022 compared to 2021; however, the upward trend resumed in subsequent years. This pattern may indicate periods of strategic investment, asset acquisition, or working capital adjustments aligned with the company’s expansion or operational needs.
- Economic Profit
-
Economic profit shifted from negative territory in 2020 and 2021 to positive figures starting in 2022, showing marked improvement over the period. Initially, economic profit was negative, indicating that the company’s returns did not exceed its cost of capital. However, by 2022, the company generated positive economic profit, which increased substantially through 2023 and 2024, reaching over 550 million US dollars. This trend reflects enhanced value creation and effective deployment of capital, signifying that the company started generating returns above its cost of capital after 2021.
In summary, the company displayed strong growth in operating profitability and invested capital, with stable capital costs. Notably, the transition to consistently positive economic profit after two initial years of negative results highlights an improvement in overall financial efficiency and shareholder value creation during the period under review.
Net Operating Profit after Taxes (NOPAT)
Chipotle Mexican Grill Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in unearned revenue.
4 Addition of increase (decrease) in restructuring liability.
5 Addition of increase (decrease) in equity equivalents to net income.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income.
The financial data over the five-year period reveals a consistent upward trend in both net income and net operating profit after taxes (NOPAT).
- Net Income
- Net income has shown significant growth each year, starting at 355,766 thousand US dollars in 2020 and increasing steadily to 1,534,110 thousand US dollars by 2024. This represents a more than fourfold increase over the period, indicating strong profitability improvements and potentially effective cost management or revenue growth strategies.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT also displays a continuous rise from 613,981 thousand US dollars in 2020 to 1,706,003 thousand US dollars in 2024. The growing NOPAT suggests enhanced operational efficiency and profitability, reflecting the company's ability to generate higher returns from its core operations after accounting for tax expenses.
Overall, the data illustrates robust financial performance, with net income and NOPAT improving substantially year over year. The parallel growth in both metrics underlines consistent operational success coupled with effective tax management. This positive trajectory indicates favorable prospects if the trends continue.
Cash Operating Taxes
Chipotle Mexican Grill Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The data reveals a consistent upward trend in both provision (benefit) for income taxes and cash operating taxes over the analyzed periods from 2020 to 2024.
- Provision (benefit) for income taxes (US$ in thousands)
- Initially, there was a negative value of -61,985 in 2020, indicating a tax benefit. However, this shifted to a positive figure in 2021, reaching 159,779, and continued to increase each subsequent year, culminating in 476,120 by 2024.
- Cash operating taxes (US$ in thousands)
- Similarly, cash operating taxes moved from a negative amount of -130,767 in 2020 to a positive 213,319 in 2021, with continuous growth each year thereafter. The amount more than doubled from 452,292 in 2023 to 573,988 in 2024.
The transition from negative to positive tax provisions and cash payments in 2021 suggests a significant change in the tax position or profitability of the company starting that year. The steady increase in both metrics through 2024 may indicate increasing taxable income or changes in tax rates or policies applied to the company. Additionally, the gap between provision for income taxes and cash operating taxes is evident and appears to widen over time, which could point to differences in deferred tax accounting effects or timing differences in tax payments.
Invested Capital
Chipotle Mexican Grill Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of unearned revenue.
5 Addition of restructuring liability.
6 Addition of equity equivalents to shareholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of construction in Progress.
9 Subtraction of debt investments.
The financial data reveals consistent growth in key capital structure components over the observed five-year period.
- Total reported debt & leases
- There is a steady increase in total reported debt and lease obligations, rising from approximately $3.16 billion in 2020 to about $4.54 billion in 2024. The growth trend is continuous year-over-year, indicating an increasing reliance on leverage or lease obligations to finance operations or expansion initiatives.
- Shareholders’ equity
- Shareholders' equity shows a positive and notable growth trend, expanding from around $2.02 billion in 2020 to nearly $3.66 billion in 2024. The equity increases are more pronounced from 2022 onwards, suggesting retained earnings accumulation, equity infusion, or improved profitability driving the net asset value upwards.
- Invested capital
- Invested capital, representing the total amount of capital used for operations, also demonstrates an overall upward trend. It rises from about $4.94 billion in 2020 to approximately $6.83 billion in 2024, with a slight dip noted in 2022 relative to 2021. The rebound following 2022 highlights expansion or reinvestment efforts surpassing the previous year's level.
Overall, the data indicates a firm that is progressively increasing both its debt and equity bases to support growing invested capital. The increasing equity base alongside rising debt suggests balanced financing efforts, potentially enhancing financial flexibility and capacity for continued growth.
Cost of Capital
Chipotle Mexican Grill Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
Economic Spread Ratio
Chipotle Mexican Grill Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit has demonstrated a significant positive turnaround over the analyzed period. Starting with a substantial loss of approximately -210 million US dollars in 2020, the loss decreased markedly in 2021 to roughly -122 million US dollars. By 2022, the company achieved a positive economic profit of around 133 million US dollars, continuing to improve to 388 million and 554 million US dollars in 2023 and 2024, respectively. This trend indicates a strong enhancement in value creation and operational efficiency.
- Invested Capital
- Invested capital has shown an overall upward trend from approximately 4.94 billion US dollars in 2020 to about 6.83 billion US dollars in 2024. There was a slight dip in 2022 compared to 2021, where invested capital decreased from approximately 5.50 billion to 5.40 billion US dollars. However, the following years saw steady growth, suggesting ongoing investments or asset growth supporting the company’s operations.
- Economic Spread Ratio
- The economic spread ratio, which reflects the return on invested capital above the cost of capital, shifted from negative values towards a progressively increasing positive percentage. It improved from -4.25% in 2020 and -2.22% in 2021 to a positive 2.47% in 2022. The ratio further increased to 6.46% in 2023 and 8.11% in 2024, indicating a growing ability of the company to generate returns exceeding its capital costs, thereby enhancing shareholder value.
Economic Profit Margin
Chipotle Mexican Grill Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in unearned revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data over the five-year period demonstrates significant trends in economic profit, adjusted revenue, and economic profit margin.
- Economic Profit
- Economic profit shows a pronounced improvement from a negative value of -210,052 thousand US dollars in 2020 to a positive 553,580 thousand US dollars in 2024. This transition from negative to positive economic profit indicates enhanced value creation and efficient use of capital over the years. Notably, the economic profit became positive starting in 2022, with consistent growth thereafter, suggesting strengthening operational performance and profitability.
- Adjusted Revenue
- Adjusted revenue has exhibited steady growth throughout the period, rising from 6,017,189 thousand US dollars in 2020 to 11,342,750 thousand US dollars in 2024. The year-over-year increases reflect successful expansion or increased sales capacity. This upward trajectory indicates robust demand and effective business scaling, contributing positively to overall financial health.
- Economic Profit Margin
- The economic profit margin has shifted from negative percentages in 2020 (-3.49%) and 2021 (-1.61%) to positive margins beginning in 2022 (1.54%), further improving to 4.88% by 2024. This progression suggests enhanced profitability relative to revenue, reflecting better cost management or pricing power. The consistent margin improvement aligns with the trends seen in economic profit and revenue growth, reinforcing the narrative of improving operational efficiency.
Overall, the data reveals a strong trend toward growing profitability and revenue, accompanied by improving economic profitability metrics, indicating successful financial and operational management over the analyzed timeframe.