Stock Analysis on Net

Chipotle Mexican Grill Inc. (NYSE:CMG)

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Analysis of Bad Debts

Microsoft Excel

Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company gross accounts receivable. The relationship between the allowance and the balance in receivables should be relatively constant unless there is a change in the economy overall or a change in customer base.

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Allowance for Doubtful Accounts Receivable

Microsoft Excel
Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Selected Financial Data (US$ in thousands)
Allowance for credit losses
Accounts receivable, gross
Financial Ratio
Allowance as a percentage of accounts receivable, gross1

Based on: 10-K (reporting date: 2025-12-31), 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).

1 2025 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for credit losses ÷ Accounts receivable, gross
= 100 × ÷ =


The allowance for credit losses exhibited fluctuating behavior over the five-year period. Initially decreasing, it subsequently increased before declining again. Accounts receivable, gross, demonstrated a consistent upward trend throughout the period. The allowance as a percentage of gross accounts receivable mirrored the fluctuations in the allowance itself, showing a corresponding decrease and increase before a final decline.

Allowance for Credit Losses
The allowance for credit losses decreased from US$1,950 thousand in 2021 to US$1,180 thousand in 2022, representing a reduction of approximately 39.5%. A subsequent increase was observed in 2023, with the allowance rising to US$2,742 thousand. This growth continued into 2024, reaching US$2,953 thousand, before decreasing significantly to US$1,670 thousand in 2025. This final decrease represents a roughly 43.4% reduction from the 2024 value.
Gross Accounts Receivable
Gross accounts receivable increased steadily throughout the period. From US$101,549 thousand in 2021, it grew to US$108,060 thousand in 2022, US$118,277 thousand in 2023, US$146,916 thousand in 2024, and finally reached US$158,136 thousand in 2025. This represents an overall increase of approximately 55.6% from 2021 to 2025.
Allowance as a Percentage of Gross Accounts Receivable
This ratio began at 1.92% in 2021, decreasing to 1.09% in 2022. It then increased to 2.32% in 2023 and 2.01% in 2024. Finally, the ratio decreased to 1.06% in 2025. The fluctuations suggest a changing assessment of credit risk relative to the outstanding receivables balance. The 2025 value is comparable to the 2022 level, despite the substantial increase in gross accounts receivable.

The observed increases in the allowance for credit losses in 2023 and 2024, coupled with the rising accounts receivable, suggest a potential increase in credit risk during those years. However, the subsequent decrease in the allowance in 2025, despite further growth in accounts receivable, indicates a reassessment of that risk, potentially due to improved collection efforts or a change in customer creditworthiness.