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.
Economic Profit
Chipotle Mexican Grill Inc., economic profit calculation
US$ in thousands
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 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,835,501 – 15.94% × 7,294,198 = 672,931
The financial trajectory from 2021 to 2025 demonstrates a significant transition from value destruction to consistent value creation. The most notable trend is the rapid expansion of economic profit, which shifted from a negative position in 2021 to a substantial positive surplus by 2025, indicating that the entity is generating returns well above its cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A strong and consistent upward trend is observed in NOPAT, which grew from 796,406 thousand US$ in 2021 to 1,835,501 thousand US$ in 2025. This represents more than a doubling of operational profitability over the five-year period, suggesting significant improvements in operational efficiency or scale.
- Cost of Capital
- The cost of capital remained relatively stable throughout the period, fluctuating within a narrow range between 15.94% and 16.38%. This stability suggests a consistent risk profile and a steady cost of funding, which provides a reliable benchmark for measuring economic performance.
- Invested Capital
- Invested capital showed a general increase, rising from 5,496,598 thousand US$ in 2021 to 7,294,198 thousand US$ in 2025, despite a slight contraction in 2022. This growth indicates continued investment in the business base to support the observed increases in operational profit.
- Economic Profit
- Economic profit experienced a sharp reversal and subsequent growth. After recording a deficit of 86,829 thousand US$ in 2021, the figure turned positive in 2022 (156,896 thousand US$) and accelerated to 672,931 thousand US$ by 2025. The widening gap between NOPAT and the capital charge confirms that the return on invested capital has expanded significantly beyond the 16% threshold required by the cost of capital.
The analysis reveals that the growth in NOPAT has significantly outpaced the growth in invested capital. Consequently, the entity has moved beyond the break-even point of economic value added, transitioning into a phase of aggressive value creation for its stakeholders.
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Net Operating Profit after Taxes (NOPAT)
Chipotle Mexican Grill Inc., NOPAT calculation
US$ in thousands
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 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 equity equivalents to net income.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 5,075,814 × 5.48% = 278,155
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 278,155 × 21.00% = 58,412
7 Addition of after taxes interest expense to net income.
Net operating profit after taxes (NOPAT) and net income both demonstrate a consistent upward trend over the five-year period. NOPAT exhibits a more substantial increase in absolute terms compared to net income, suggesting changes in the company’s capital structure or operating efficiency are impacting profitability beyond reported net earnings.
- NOPAT Trend
- NOPAT increased from US$796.406 million in 2021 to US$1,835.501 million in 2025. This represents a cumulative growth of approximately 130.5%. The growth rate appears to be accelerating, with larger year-over-year increases observed in later periods. Specifically, the increase from 2022 to 2023 (US$388.176 million) is greater than the increase from 2021 to 2022 (US$226.061 million).
- Net Income Trend
- Net income also increased consistently, rising from US$652.984 million in 2021 to US$1,535.761 million in 2025, a cumulative growth of approximately 135.3%. While net income growth is present, the rate of increase appears to moderate in the later years of the period, particularly between 2024 and 2025, where the increase is minimal (US$1.651 million).
- Relationship between NOPAT and Net Income
- The difference between NOPAT and net income widens over time. In 2021, NOPAT exceeded net income by US$143.422 million. By 2025, this difference had grown to US$300.740 million. This divergence could be attributable to factors such as increasing interest expense, non-operating income, or changes in the effective tax rate. Further investigation into these areas would be necessary to determine the specific drivers.
The sustained growth in both NOPAT and net income indicates improving operational performance and profitability. However, the widening gap between the two metrics warrants further scrutiny to understand the underlying financial dynamics.
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Cash Operating Taxes
Chipotle Mexican Grill Inc., cash operating taxes calculation
US$ in thousands
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).
The provision for income taxes and cash operating taxes both demonstrate increasing values from 2021 to 2023, followed by fluctuations in subsequent years. A significant increase is observed in both metrics between 2021 and 2022, continuing into 2023, before diverging trends emerge.
- Provision for Income Taxes
- The provision for income taxes increased from US$159,779 thousand in 2021 to US$282,430 thousand in 2022, and further to US$391,769 thousand in 2023. This represents substantial year-over-year growth. In 2024, the provision rose again to US$476,120 thousand, before experiencing a slight decrease to US$473,758 thousand in 2025. The 2025 value remains higher than the 2023 and 2022 figures.
- Cash Operating Taxes
- Cash operating taxes followed a similar pattern of growth initially, increasing from US$205,847 thousand in 2021 to US$363,003 thousand in 2022, and then to US$444,667 thousand in 2023. However, the growth accelerated in 2024, reaching US$569,594 thousand. A notable decrease is then observed in 2025, with cash operating taxes falling to US$452,687 thousand. This 2025 value is comparable to the 2023 level.
- Relationship between Provision and Cash Taxes
- In 2021 and 2022, the difference between cash operating taxes and the provision for income taxes was approximately US$46,000 thousand and US$80,000 thousand, respectively. This difference widened in 2023 to approximately US$53,000 thousand, and further increased to US$93,000 thousand in 2024. However, in 2025, the difference narrowed significantly to approximately US$1,000 thousand, indicating a convergence of these two tax measures. This suggests a potential shift in the timing of tax payments or changes in deferred tax assets/liabilities.
The increasing trend in both tax metrics through 2023 likely reflects increased profitability. The subsequent divergence in 2024 and 2025, particularly the decrease in cash operating taxes in 2025, warrants further investigation to understand the underlying drivers. The narrowing gap between the provision for income taxes and cash operating taxes in 2025 is a key observation that could indicate changes in tax planning strategies or accounting treatments.
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Invested Capital
Chipotle Mexican Grill Inc., invested capital calculation (financing approach)
US$ in thousands
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 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 equity equivalents to shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in Progress.
8 Subtraction of debt investments.
The reported invested capital exhibited a fluctuating pattern over the five-year period. Total reported debt & leases consistently increased year-over-year, while shareholders’ equity showed more variability. These movements collectively influenced the overall trend in invested capital.
- Total Reported Debt & Leases
- Total reported debt & leases demonstrated a consistent upward trend throughout the period, increasing from US$3,520,314 thousand in 2021 to US$5,075,814 thousand in 2025. The rate of increase appeared relatively stable, suggesting a consistent reliance on debt financing or lease obligations.
- Shareholders’ Equity
- Shareholders’ equity experienced fluctuations. It increased from US$2,297,374 thousand in 2021 to US$3,062,207 thousand in 2023, representing substantial growth. However, it decreased to US$2,830,607 thousand in 2025, indicating potential share repurchases, dividend payouts, or retained earnings impacts. The 2024 value of US$3,655,546 thousand represents the highest point in the observed period.
- Invested Capital
- Invested capital initially decreased from US$5,496,598 thousand in 2021 to US$5,396,406 thousand in 2022. Subsequently, it increased significantly, reaching US$6,006,837 thousand in 2023 and US$6,827,838 thousand in 2024. The growth slowed in 2025, with invested capital reaching US$7,294,198 thousand. The overall trend suggests an increasing need for capital to support operations and growth, with a slight deceleration in the most recent year.
The interplay between increasing debt and fluctuating equity resulted in a generally upward trend in invested capital, though not without intermediate variations. The substantial increase in invested capital between 2022 and 2024 warrants further investigation to understand the underlying drivers of capital deployment.
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Cost of Capital
Chipotle Mexican Grill Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 52,005,750) | 52,005,750) | ÷ | 57,081,564) | = | 0.91 | 0.91 | × | 17.07% | = | 15.55% | ||
| Operating lease liability3 | 5,075,814) | 5,075,814) | ÷ | 57,081,564) | = | 0.09 | 0.09 | × | 5.48% × (1 – 21.00%) | = | 0.38% | ||
| Total: | 57,081,564) | 1.00 | 15.94% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 77,945,431) | 77,945,431) | ÷ | 82,486,049) | = | 0.94 | 0.94 | × | 17.07% | = | 16.13% | ||
| Operating lease liability3 | 4,540,618) | 4,540,618) | ÷ | 82,486,049) | = | 0.06 | 0.06 | × | 5.30% × (1 – 21.00%) | = | 0.23% | ||
| Total: | 82,486,049) | 1.00 | 16.36% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 71,857,173) | 71,857,173) | ÷ | 75,908,798) | = | 0.95 | 0.95 | × | 17.07% | = | 16.16% | ||
| Operating lease liability3 | 4,051,625) | 4,051,625) | ÷ | 75,908,798) | = | 0.05 | 0.05 | × | 5.10% × (1 – 21.00%) | = | 0.22% | ||
| Total: | 75,908,798) | 1.00 | 16.38% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 44,388,308) | 44,388,308) | ÷ | 48,119,718) | = | 0.92 | 0.92 | × | 17.07% | = | 15.75% | ||
| Operating lease liability3 | 3,731,410) | 3,731,410) | ÷ | 48,119,718) | = | 0.08 | 0.08 | × | 4.77% × (1 – 21.00%) | = | 0.29% | ||
| Total: | 48,119,718) | 1.00 | 16.04% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 43,771,887) | 43,771,887) | ÷ | 47,292,201) | = | 0.93 | 0.93 | × | 17.07% | = | 15.80% | ||
| Operating lease liability3 | 3,520,314) | 3,520,314) | ÷ | 47,292,201) | = | 0.07 | 0.07 | × | 4.56% × (1 – 21.00%) | = | 0.27% | ||
| Total: | 47,292,201) | 1.00 | 16.07% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
Economic Spread Ratio
Chipotle Mexican Grill Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | 672,931) | 593,219) | 427,011) | 156,896) | (86,829) | |
| Invested capital2 | 7,294,198) | 6,827,838) | 6,006,837) | 5,396,406) | 5,496,598) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 9.23% | 8.69% | 7.11% | 2.91% | -1.58% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | 24.35% | 24.17% | 9.43% | 11.07% | -11.04% | |
| Booking Holdings Inc. | 24.28% | 29.14% | 14.69% | 3.84% | -13.61% | |
| DoorDash, Inc. | -19.05% | -27.09% | -39.53% | -53.31% | -39.82% | |
| McDonald’s Corp. | 9.22% | 8.74% | 8.81% | 6.01% | 8.43% | |
| Starbucks Corp. | -4.58% | 3.58% | 5.28% | 2.88% | 4.13% | |
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 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 672,931 ÷ 7,294,198 = 9.23%
4 Click competitor name to see calculations.
The financial performance from 2021 to 2025 demonstrates a consistent trajectory of value creation and improved capital efficiency. A transition from negative economic profit to a sustained and growing positive surplus indicates that the entity has successfully surpassed its cost of capital to generate significant economic value.
- Economic Profit
- A significant upward trend is observed, moving from a deficit of US$ 86.8 million in 2021 to a surplus of US$ 672.9 million by 2025. This progression reflects a strong recovery and a scalable increase in the ability to generate returns in excess of the required capital charges.
- Invested Capital
- Invested capital remained relatively stable in 2022 before entering a period of steady expansion, increasing from US$ 5.4 billion in 2021 to US$ 7.3 billion in 2025. This suggests a strategic deployment of resources to fund growth and expand operational capacity.
- Economic Spread Ratio
- The economic spread ratio shows a continuous and accelerating improvement, rising from -1.58% in 2021 to 9.23% in 2025. The shift from a negative spread, which indicates value destruction, to a high positive spread confirms that the return on invested capital has grown substantially faster than the cost of that capital, signifying heightened financial productivity.
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Economic Profit Margin
Chipotle Mexican Grill Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | 672,931) | 593,219) | 427,011) | 156,896) | (86,829) | |
| Revenue | 11,925,601) | 11,313,853) | 9,871,649) | 8,634,652) | 7,547,061) | |
| Add: Increase (decrease) in unearned revenue | 1,798) | 28,897) | 26,609) | 26,720) | 28,601) | |
| Adjusted revenue | 11,927,399) | 11,342,750) | 9,898,258) | 8,661,372) | 7,575,662) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 5.64% | 5.23% | 4.31% | 1.81% | -1.15% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | 11.34% | 13.13% | 5.49% | 8.79% | -9.98% | |
| Booking Holdings Inc. | 11.65% | 15.93% | 7.85% | 3.06% | -18.64% | |
| DoorDash, Inc. | -15.62% | -15.82% | -23.98% | -43.08% | -25.90% | |
| McDonald’s Corp. | 18.38% | 16.74% | 17.29% | 11.78% | 17.31% | |
| Starbucks Corp. | -2.97% | 2.33% | 3.26% | 1.83% | 3.37% | |
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 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × 672,931 ÷ 11,927,399 = 5.64%
3 Click competitor name to see calculations.
A strong positive trajectory in economic value generation is evident from 2021 through 2025. The organization transitioned from a period of economic value destruction to consistent value creation, characterized by simultaneous growth in adjusted revenue and economic profit.
- Economic Profit Trends
- A significant turnaround occurred between 2021 and 2022, where economic profit shifted from a negative value of 86,829 thousand US$ to a positive 156,896 thousand US$. This growth accelerated steadily through 2025, reaching a peak of 672,931 thousand US$. This trend indicates that the entity's operating returns have increasingly exceeded its weighted average cost of capital.
- Adjusted Revenue Growth
- Revenue exhibited a consistent upward climb over the five-year period, increasing from 7,575,662 thousand US$ in 2021 to 11,927,399 thousand US$ in 2025. The steady expansion of the top line provided the scale necessary to facilitate the observed improvements in economic profit.
- Economic Profit Margin Expansion
- The economic profit margin demonstrated substantial recovery and expansion, moving from -1.15% in 2021 to 5.64% by 2025. The most rapid acceleration occurred between 2022 and 2023, where the margin increased from 1.81% to 4.31%. The continued margin growth through 2025 suggests enhancing operational efficiency and a superior ability to generate returns relative to the capital employed.
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