Chipotle Mexican Grill Inc. (NYSE:CMG)

An examination of the financial information reveals adjustments made to total assets and shareholders’ equity over a five-year period. These adjustments consistently relate to a reduction in reported values, suggesting the removal of goodwill or intangible assets from the balance sheet.

Total Asset Adjustments

Reported total assets increased from US$6,652,958 thousand in 2021 to US$9,204,374 thousand in 2024, before decreasing to US$8,994,531 thousand in 2025. Correspondingly, adjusted total assets followed a similar trajectory, ranging from US$6,631,019 thousand to US$9,182,435 thousand, and concluding at US$8,972,592 thousand. The difference between reported and adjusted figures remained relatively consistent across all years, indicating a systematic reduction in asset values. The largest absolute difference between reported and adjusted total assets was approximately US$212,000 thousand in 2024.

Shareholders’ Equity Adjustments

Reported shareholders’ equity exhibited growth from US$2,297,374 thousand in 2021 to US$3,655,546 thousand in 2024, followed by a decline to US$2,830,607 thousand in 2025. Adjusted shareholders’ equity mirrored this pattern, moving from US$2,275,435 thousand to US$3,633,607 thousand, and then to US$2,808,668 thousand. The consistent difference between reported and adjusted shareholders’ equity suggests a corresponding reduction in equity related to the asset adjustments. The largest absolute difference between reported and adjusted shareholders’ equity was approximately US$21,939 thousand in 2024.

The consistent reduction in both total assets and shareholders’ equity through the adjustments implies a systematic write-down or removal of an asset class, most likely goodwill or intangible assets. The magnitude of the adjustments appears to be relatively stable year-over-year, suggesting a deliberate and ongoing process. The decrease in both reported and adjusted values in 2025 warrants further investigation to determine the underlying cause of the decline.

Adjustment Magnitude

The adjustments to both total assets and shareholders’ equity remained within a narrow range throughout the period. The adjustments to total assets ranged from approximately US$21,939 thousand to US$22,939 thousand, while adjustments to shareholders’ equity ranged from approximately US$21,939 thousand to US$22,039 thousand. This consistency suggests the adjustments are not driven by volatile or unpredictable factors.

The financial metrics demonstrate a generally stable performance with minor fluctuations over the five-year period. Adjusting for goodwill and intangible assets has a limited impact on the reported values, suggesting these items do not significantly distort the underlying financial performance as measured by these ratios. Overall, the adjusted ratios closely mirror the reported ratios, indicating that goodwill and intangibles are not a primary driver of the observed trends.

Total Asset Turnover

Reported and adjusted total asset turnover ratios remain remarkably consistent, fluctuating between 1.13 and 1.33. Both metrics show a slight increase from 2021 to 2022, followed by relative stability through 2024, and a further increase in 2025. The minimal difference between reported and adjusted values suggests that goodwill and intangible assets do not materially affect the efficiency with which assets are used to generate sales.

Financial Leverage

Reported and adjusted financial leverage ratios exhibit a similar pattern. A slight increase is observed from 2021 to 2023, followed by a decrease in 2024, and a notable increase in 2025, reaching 3.18 and 3.19 respectively. The consistency between reported and adjusted figures indicates that the company’s capital structure, as reflected in this ratio, is not substantially altered by the exclusion of goodwill and intangible assets.

Return on Equity (ROE)

Both reported and adjusted ROE demonstrate a strong upward trend. Starting at 28.42% in 2021, ROE increases to 54.26% in 2025. The adjusted ROE consistently exceeds the reported ROE, albeit by a small margin, across all years. This suggests that the inclusion of goodwill and intangibles slightly depresses the reported ROE. The overall trend indicates improving profitability relative to shareholder equity.

Return on Assets (ROA)

Reported and adjusted ROA both show a consistent upward trend, increasing from 9.81% in 2021 to 17.07% in 2025. Similar to ROE, the adjusted ROA is consistently higher than the reported ROA, though the difference remains small. This indicates that the company is becoming more efficient at generating profits from its assets, and the impact of goodwill and intangibles on this efficiency is minimal.

In conclusion, the adjustments made for goodwill and intangible assets result in only marginal changes to the calculated ratios. This suggests that these assets do not significantly influence the core financial performance metrics analyzed, and the observed trends are representative of the underlying business operations.

The reported and adjusted total asset turnover ratios exhibit similar trends over the five-year period. Both ratios demonstrate an initial increase followed by stabilization and a subsequent rise. A consistent pattern emerges, suggesting a relationship between asset utilization and revenue generation.

Reported Total Asset Turnover

The reported total asset turnover ratio increased from 1.13 in 2021 to 1.25 in 2022, indicating improved efficiency in generating sales from assets. This ratio then remained stable at 1.23 for both 2023 and 2024 before increasing to 1.33 in 2025. This final increase suggests a renewed improvement in the company’s ability to convert its investments in assets into revenue.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrors the trend of the reported ratio. It rose from 1.14 in 2021 to 1.25 in 2022, held steady at 1.23 in 2023 and 2024, and then increased to 1.33 in 2025. The consistency between the reported and adjusted ratios suggests that the adjustments made to total assets do not materially impact the overall assessment of asset utilization efficiency.

The slight difference between reported and adjusted total assets appears to have a minimal effect on the calculated turnover ratios. The overall trend indicates a strengthening ability to generate sales per dollar of assets, particularly evident in the most recent year presented. The stabilization in 2023 and 2024 may warrant further investigation to understand the underlying factors contributing to this period of consistent performance before the final year’s improvement.

The period between 2021 and 2025 demonstrates fluctuating trends in both reported and adjusted financial leverage. Total assets exhibited an overall increase, though with a slight decrease in the final year of the observed period. Shareholders’ equity also generally increased, mirroring the asset trend, but similarly experienced a decline from 2024 to 2025. The adjusted financial leverage ratios closely tracked the reported ratios, suggesting that the adjustments made to assets and equity did not significantly alter the overall leverage picture.

Total Assets

Reported total assets increased from US$6,652,958 thousand in 2021 to US$9,204,374 thousand in 2024, representing substantial growth. However, a decrease to US$8,994,531 thousand was observed in 2025. Adjusted total assets followed a similar pattern, remaining consistently close to the reported values.

Shareholders’ Equity

Reported shareholders’ equity increased from US$2,297,374 thousand in 2021 to US$3,655,546 thousand in 2024, indicating strengthening equity. A notable decrease to US$2,830,607 thousand occurred in 2025. Adjusted shareholders’ equity mirrored this trend, with values consistently near the reported figures.

Reported Financial Leverage

Reported financial leverage initially increased from 2.90 in 2021 to 2.93 in 2022, then decreased to 2.52 in 2024. A subsequent increase to 3.18 was recorded in 2025, representing the highest leverage ratio within the observed period.

Adjusted Financial Leverage

Adjusted financial leverage exhibited a pattern nearly identical to the reported leverage. It rose from 2.91 in 2021 to 2.94 in 2022, declined to 2.53 in 2024, and increased to 3.19 in 2025. The consistency between reported and adjusted leverage suggests that the adjustments to total assets and shareholders’ equity had a minimal impact on the overall leverage calculation.

The increase in financial leverage in 2025, as indicated by both reported and adjusted ratios, warrants further investigation. The simultaneous decrease in both total assets and shareholders’ equity likely contributed to this increase, and the underlying reasons for these declines should be examined to assess potential risks.

Shareholders’ equity, both reported and adjusted, demonstrates a generally increasing trend over the observed period. However, a notable decrease is evident in the most recent year presented. Return on Equity (ROE), similarly, exhibits an overall upward trajectory, with a peak in the final year, though this also reflects the equity decrease.

Shareholders’ Equity

Reported shareholders’ equity increased from US$2,297,374 thousand in 2021 to US$3,655,546 thousand in 2024, representing substantial growth. However, it declined to US$2,830,607 thousand in 2025. Adjusted shareholders’ equity follows a similar pattern, moving from US$2,275,435 thousand to US$3,633,607 thousand over the same period before decreasing to US$2,808,668 thousand in 2025. The difference between reported and adjusted equity remains relatively consistent across the years.

Return on Equity (ROE)

Reported ROE increased consistently from 28.42% in 2021 to 54.26% in 2025. Adjusted ROE mirrors this trend, rising from 28.70% to 54.68% over the same timeframe. The adjusted ROE consistently exceeds the reported ROE by a small margin throughout the period. The substantial increase in ROE from 2021 to 2025 suggests improving profitability relative to equity, although the 2025 value is influenced by the concurrent decrease in shareholders’ equity.

The convergence of reported and adjusted ROE values indicates that adjustments to shareholders’ equity have a limited impact on the overall ROE calculation. The decline in shareholders’ equity in 2025, despite the continued high ROE, warrants further investigation to determine the underlying cause and potential implications for future performance. The consistent, albeit small, difference between reported and adjusted ROE suggests a recurring, systematic adjustment being applied to shareholders’ equity.

The reported and adjusted total assets exhibited a consistent upward trajectory from 2021 through 2024, followed by a slight decrease in 2025. This growth in asset base appears to correlate with increases in both reported and adjusted return on assets over the same period.

Total Assets

Reported total assets increased from US$6,652,958 thousand in 2021 to US$9,204,374 thousand in 2024, representing a substantial expansion of the company’s asset holdings. A minor decline to US$8,994,531 thousand was observed in 2025. Adjusted total assets mirrored this pattern, moving from US$6,631,019 thousand to US$9,182,435 thousand between 2021 and 2024, before decreasing to US$8,972,592 thousand in 2025. The difference between reported and adjusted total assets remained relatively small across all periods.

Return on Assets (ROA)

Both reported and adjusted ROA demonstrated a clear upward trend from 2021 to 2025. Reported ROA increased from 9.81% in 2021 to 17.07% in 2025. Adjusted ROA followed a similar pattern, rising from 9.85% to 17.12% over the same timeframe. The adjusted ROA consistently exceeded the reported ROA, though the difference between the two metrics remained minimal throughout the analyzed period, generally within 0.04 to 0.05 percentage points.

The consistent increase in ROA, alongside the growth in total assets, suggests an effective utilization of assets to generate profits. The slight decrease in total assets in 2025 did not appear to negatively impact ROA, indicating continued operational efficiency. The small difference between reported and adjusted ROA suggests that the adjustments made to total assets have a limited impact on the overall profitability assessment.