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:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes has exhibited a consistent upward trend over the five-year period. Starting from approximately $614 million in 2020, it increased each year, reaching $1.71 billion by the end of 2024. This growth indicates improving operational efficiency and profitability.
- Cost of Capital
- The cost of capital has remained relatively stable, fluctuating slightly between 16.34% and 16.68% over the five years. This stability suggests that the company's cost of financing its operations has not experienced significant volatility during this time.
- Invested Capital
- Invested capital showed a general upward movement, rising from about $4.94 billion in 2020 to approximately $6.83 billion in 2024, although there was a minor decline between 2021 and 2022. This indicates ongoing investments in assets or growth initiatives with a brief period of marginal contraction or reallocation.
- Economic Profit
- Economic profit has improved markedly, moving from negative values in 2020 and 2021 towards positive and growing figures thereafter. Initially, the company experienced economic losses, measuring approximately -$200 million and -$111 million in the first two years. However, it turned positive in 2022 and continued expanding to over $568 million by 2024, reflecting enhanced value creation relative to the cost of capital.
- Overall Insights
- Overall, the company's financial performance demonstrates strengthening operating profitability and value creation. Despite relatively stable capital costs and a sizeable invested capital base, increasing NOPAT and positive economic profit growth indicate effective utilization of capital and successful operational execution over the analyzed timeline.
Net Operating Profit after Taxes (NOPAT)
Chipotle Mexican Grill Inc., NOPAT calculation
US$ 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. | ||||||
| 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 exhibits a significant positive trend over the observed five-year period. Initially, there were substantial economic losses in 2020 and 2021, with values of approximately -199.7 million and -110.6 million US dollars respectively. However, the situation reversed starting in 2022 with an economic profit of 144.4 million US dollars, which further increased to 401.1 million in 2023 and 568.1 million in 2024. This indicates a marked improvement in the company’s ability to generate returns above the cost of capital.
- Invested Capital
- Invested capital increased steadily from about 4.94 billion US dollars in 2020 to approximately 6.83 billion US dollars in 2024. While there was a slight decline between 2021 and 2022, from 5.50 billion to 5.40 billion US dollars, the overall trend remained upward. This suggests ongoing investments in the company's operations, assets, or growth initiatives.
- Economic Spread Ratio
- The economic spread ratio followed a positive trajectory, moving from negative territory into solid positive territory over the years. The ratio shifted from -4.04% in 2020 to -2.01% in 2021, indicating an initial reduction in the economic losses relative to invested capital. It turned positive in 2022 with 2.68%, then increased to 6.68% in 2023 and further to 8.32% in 2024. This change reflects improved efficiency and profitability relative to the invested capital.
- Summary
- The overall financial trends demonstrate a significant turnaround in economic profitability starting from 2022, following two years of notable losses. Concurrently, the company maintained a steady increase in invested capital, supporting growth or operational expansion. The economic spread ratio's improvement corroborates enhanced value creation and operational performance relative to invested capital. These patterns suggest a strengthening financial position and improved capacity to generate value above the cost of capital over the five-year span.
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. | ||||||
| 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 analyzed period reveals several key trends in performance and profitability.
- Adjusted Revenue
- There is a consistent and robust upward trend in adjusted revenue, increasing from approximately 6.02 billion US dollars in 2020 to about 11.34 billion US dollars in 2024. This reflects a strong growth trajectory with the revenue nearly doubling over five years, indicative of successful business expansion and increased market demand.
- Economic Profit
- The economic profit has shown a significant improvement over the period. Starting from a negative value of about -199.68 million US dollars in 2020, the figure improves substantially to a positive 568.12 million US dollars by 2024. This turnaround from negative to positive economic profit highlights the company’s enhanced ability to generate wealth beyond its cost of capital, signifying better operational efficiency and value creation.
- Economic Profit Margin
- The economic profit margin has followed a similar positive trajectory, moving from a negative margin of -3.32% in 2020 to a positive margin of 5.01% in 2024. This improvement reflects increasing profitability relative to revenue, indicating more effective management of costs and capital usage in recent years.
Overall, the data depict a strong performance improvement trend, with rising revenues complemented by growing economic profits and increasingly favorable profit margins. The transition from negative to positive economic profit and margin underscores enhanced operational effectiveness and successful strategic execution during the period under review.