Chipotle Mexican Grill Inc. (NYSE:CMG)

Current Ratio Trends

The current ratio exhibited a general decline from early 2021 through mid-2022, dropping from 1.75 in March 2021 to 1.26 in June 2022. Subsequently, there was a recovery phase starting in the third quarter of 2022, with the ratio increasing to a peak of 1.71 in the second quarter of 2024. After this peak, the current ratio decreased moderately, stabilizing around 1.52 to 1.65 toward the end of the observed period in late 2025. This pattern indicates fluctuations in short-term liquidity, with an initial weakening followed by improvement and relative stabilization.

Quick Ratio Trends

The quick ratio followed a broadly similar pattern to that of the current ratio but showed more pronounced variability. Starting at 1.35 in March 2021, it declined steadily to a low of 1.02 in June 2022. A recovery followed, with the quick ratio rising to 1.52 in the second quarter of 2024. After this peak, the ratio experienced some oscillations but remained above 1.3 through subsequent quarters, ending at 1.32 in September 2025. This trajectory suggests an improvement in the company’s ability to cover its current liabilities with liquid assets after mid-2022, although some volatility persisted.

Cash Ratio Trends

The cash ratio demonstrated a downward trend initially, declining from 1.27 in March 2021 to 0.92 in June 2022, reflecting a reduction in cash and cash equivalents relative to current liabilities. After this trough, the cash ratio improved consistently, reaching a peak of 1.43 in the second quarter of 2024. Following the peak, some moderate decreases occurred, but the ratio remained above 1.2 through the remaining periods, closing at 1.24 in September 2025. This indicates a strengthening of the company's immediate liquidity position after mid-2022, suggesting greater availability of cash and equivalents relative to short-term obligations.

Overall Liquidity Analysis

The liquidity ratios collectively reveal a period of compression in liquidity from early 2021 to mid-2022, potentially indicating increased short-term financial pressure during that time. From mid-2022 onwards, all three ratios generally trend upward before stabilizing, signifying an improvement in the company's liquidity management and financial stability. The quick and cash ratios show greater sensitivity to fluctuations than the current ratio, reflecting the company’s varying levels of highly liquid assets over time. The liquidity position appears to balance out towards the latter part of the timeline, evidencing a more controlled and potentially conservative approach to managing current assets and liabilities.

The analysis of the quarterly financial data reveals evolving trends in the company's liquidity position over the examined periods.

Current Assets

The current assets exhibit variability throughout the quarters, beginning at approximately 1,456,851 thousand USD and showing some fluctuations initially, with a notable decline around early 2022 to about 1,096,493 thousand USD. Subsequently, a recovery trend is observable, as current assets increase steadily from mid-2022 onward, reaching a high point near 1,869,125 thousand USD in mid-2025. Despite some minor declines, the overall pattern indicates growth in liquid resources over the longer term.

Current Liabilities

Current liabilities remain relatively stable with moderate fluctuations throughout the periods. The initial values hover in the range of 834,000 to 873,000 thousand USD, with a slight increase observed towards the end of 2022. From 2023 onwards, current liabilities rise steadily but at a slower pace compared to current assets, reaching just over 1,150,000 thousand USD by mid-2025, indicating a gradual increase in short-term obligations.

Current Ratio

The current ratio, an indicator of liquidity, shows a downward trend in early 2022, reaching a low around 1.26 to 1.32. This suggests a tighter liquidity position during that period. However, from mid-2022 forward, the current ratio improves consistently, peaking near 1.71 in the mid-2024 quarter. Toward the mid-2025 period, the ratio experiences some decline but remains above 1.5, indicating that current assets continue to cover current liabilities favorably overall.

In summary, the company's liquidity position experienced some initial pressure during early 2022, reflected by a decrease in both current assets and the current ratio. Following this period, there is a clear recovery and strengthening trend in liquidity as current assets grow more robustly compared to current liabilities. The current ratio consistently remains above 1.5 for most quarters after 2022, suggesting a relatively stable ability to meet short-term obligations.

The financial data reveals several noteworthy trends in liquidity and working capital management over the observed periods.

Total Quick Assets

Total quick assets demonstrate notable fluctuations across the quarters. Starting at approximately $1.13 billion in March 2021, they experienced a decline through mid-2022, reaching a low near $845 million in June 2022. Following this trough, quick assets generally increased, peaking above $1.58 billion in mid-2024, before moderating somewhat towards early 2025, ending near $1.52 billion. This pattern suggests a period of asset consolidation or utilization reduction in 2021-2022, followed by a recovery and growth phase through 2024.

Current Liabilities

Current liabilities remained relatively stable yet trended upward over the timeline. Initially around $834 million in early 2021, liabilities ranged within the $830 million to $1.17 billion band, with some increases noticeable especially towards the fourth quarters of 2022 and 2024. The gradual rise in current liabilities indicates increasing short-term obligations, consistent with business expansion or rising operational expenses during this period.

Quick Ratio

The quick ratio, an indicator of short-term liquidity, reflects the combined dynamics of quick assets and current liabilities. From a strong position of 1.35 in March 2021, it declined to approximately 1.02 by June 2022, identifying reduced coverage of liquid assets over short-term liabilities. Subsequently, the ratio improved, surpassing 1.50 in mid-2024, implying enhanced liquidity. However, approaching 2025, a slight decrease is observable, with the ratio remaining above 1.30, indicating the company continues to maintain a healthy liquid asset base relative to its current liabilities.

Overall, the data shows a temporary contraction in liquid assets relative to liabilities during 2021-2022, followed by a recovery and strengthening of liquidity in the subsequent years. The management appears to have navigated the periods of lower liquidity by increasing quick assets or managing liabilities to restore a solid quick ratio above 1.3, which suggests prudent short-term financial stability.

The analysis of the quarterly financial data over the examined periods reveals several notable trends related to the company's liquidity and short-term financial position.

Total Cash Assets

The total cash assets exhibited a fluctuating pattern across the quarters. Initially, there was a slight decrease from approximately 1.06 billion USD to about 0.76 billion USD between March 2021 and June 2022. Following this period of decline, a recovery phase is observed, with cash assets increasing steadily to reach above 1.5 billion USD by mid-2025. This recovery indicates a strengthening liquidity position in the latter periods.

Current Liabilities

Current liabilities showed a general upward trajectory over the entire timeline. Starting at approximately 834 million USD in early 2021, liabilities rose with some fluctuations to exceed 1.15 billion USD by September 2025. Notably, there was a considerable increase in current liabilities between late 2023 and mid-2025, suggesting an expansion in short-term obligations which may be related to operating activities or financing decisions.

Cash Ratio

The cash ratio, representing liquidity available to cover current liabilities, mirrored the variations in cash assets and liabilities. Initially strong at 1.27 in early 2021, the ratio dipped below 1.0 in mid-2022, signaling a period where cash was insufficient to cover all current liabilities fully. From late 2022 onwards, the cash ratio improved consistently, peaking around 1.43 by mid-2024 before stabilizing slightly above 1.2 through mid-2025. This improvement reflects enhanced short-term liquidity management despite rising current liabilities.

Overall, the financial data indicate that although the company faced reduced liquidity in 2021 and early 2022, it managed to restore and improve its cash reserves relative to its short-term obligations in subsequent quarters. The increase in current liabilities alongside the recovery of cash assets suggests strategic growth or investment activities while maintaining adequate liquidity buffers as evidenced by a cash ratio above 1.0 in the majority of the later periods.