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 – 16.03% × 7,294,198 = 666,381
A comprehensive analysis of the financial performance from 2021 to 2025 reveals a significant transition from value destruction to substantial value creation. The company successfully reversed a negative economic profit position in 2021, achieving a consistent and accelerating upward trajectory in economic profit through 2025.
- Net Operating Profit After Taxes (NOPAT)
- A strong and continuous growth trend is observed in NOPAT, which increased from 796,406 thousand US$ in 2021 to 1,835,501 thousand US$ by 2025. This represents a more than two-fold increase in operating profitability over the five-year period, indicating significant improvements in operational efficiency and revenue generation.
- Invested Capital and Cost of Capital
- Invested capital remained relatively stable in 2022 before entering a period of sustained growth, rising to 7,294,198 thousand US$ by 2025. Concurrently, the cost of capital remained remarkably stable, fluctuating within a narrow range between 16.03% and 16.47%. The stability of the cost of capital suggests a consistent risk profile and financing environment despite the expansion of the capital base.
- Economic Profit Trends
- The economic profit transitioned from a deficit of 91,843 thousand US$ in 2021 to a surplus of 666,381 thousand US$ in 2025. This shift indicates that the return on invested capital has surpassed the weighted average cost of capital. The growth in economic profit is primarily driven by the fact that NOPAT grew at a significantly faster rate than the capital charge associated with the invested capital.
The overall financial trajectory demonstrates an increasing ability to generate returns in excess of the required cost of capital. The acceleration of economic profit suggests that recent capital investments have been highly accretive, enhancing the overall economic value of the organization.
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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 | × | 17.17% | = | 15.64% | ||
| 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 | 16.03% | ||||||||||
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 | × | 17.17% | = | 16.22% | ||
| 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 | 16.46% | ||||||||||
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 | × | 17.17% | = | 16.25% | ||
| 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 | 16.47% | ||||||||||
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 | × | 17.17% | = | 15.84% | ||
| 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 | 16.13% | ||||||||||
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 | × | 17.17% | = | 15.89% | ||
| 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 | 16.16% | ||||||||||
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 | 666,381) | 586,860) | 421,406) | 151,989) | (91,843) | |
| Invested capital2 | 7,294,198) | 6,827,838) | 6,006,837) | 5,396,406) | 5,496,598) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 9.14% | 8.60% | 7.02% | 2.82% | -1.67% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | 24.30% | 24.12% | 9.38% | 11.02% | -11.09% | |
| Booking Holdings Inc. | 24.25% | 29.11% | 14.66% | 3.80% | -13.64% | |
| DoorDash, Inc. | -18.94% | -26.98% | -39.42% | -53.20% | -39.71% | |
| McDonald’s Corp. | 9.05% | 8.56% | 8.64% | 5.84% | 8.26% | |
| Starbucks Corp. | -4.64% | 3.51% | 5.21% | 2.81% | 4.06% | |
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 × 666,381 ÷ 7,294,198 = 9.14%
4 Click competitor name to see calculations.
The financial trajectory between December 31, 2021, and December 31, 2025, demonstrates a significant shift from value destruction to consistent value creation. A strong recovery is evident as the company transitioned from a negative economic profit to a substantial positive surplus, characterized by an expanding gap between the return on invested capital and the cost of capital.
- Economic Profit
- A consistent upward trend is observed in economic profit, which rose from a deficit of 91,843 thousand US dollars in 2021 to 666,381 thousand US dollars by 2025. The transition to positive economic profit occurred in 2022, followed by accelerated growth in subsequent years. This progression indicates that the organization has successfully increased its operating performance beyond the required return on its capital base.
- Invested Capital
- Invested capital remained relatively stable between 2021 and 2022, with a slight decrease from 5,496,598 thousand US dollars to 5,396,406 thousand US dollars. However, from 2023 onward, a steady expansion is noted, with capital reaching 7,294,198 thousand US dollars by the end of 2025. This suggests a strategic increase in asset deployment to support the growth in economic profit.
- Economic Spread Ratio
- The economic spread ratio exhibits a strong positive correlation with economic profit, moving from -1.67% in 2021 to 9.14% in 2025. The movement from a negative spread to a positive one confirms that the return on invested capital surpassed the cost of capital starting in 2022. The continuous increase in the ratio reflects improving capital efficiency and an enhanced ability to generate excess returns over the five-year period.
The simultaneous increase in both invested capital and the economic spread ratio suggests that the growth in the capital base has been managed efficiently. Rather than experiencing diminishing returns, the organization has achieved a higher rate of return per unit of capital invested, resulting in an accelerating pace of economic value added.
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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 | 666,381) | 586,860) | 421,406) | 151,989) | (91,843) | |
| 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 | 5.59% | 5.17% | 4.26% | 1.75% | -1.21% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | 11.32% | 13.10% | 5.46% | 8.75% | -10.03% | |
| Booking Holdings Inc. | 11.63% | 15.91% | 7.83% | 3.04% | -18.68% | |
| DoorDash, Inc. | -15.53% | -15.76% | -23.91% | -42.99% | -25.83% | |
| McDonald’s Corp. | 18.03% | 16.40% | 16.95% | 11.43% | 16.97% | |
| Starbucks Corp. | -3.01% | 2.29% | 3.22% | 1.79% | 3.31% | |
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 × 666,381 ÷ 11,927,399 = 5.59%
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 demonstrates a significant transition from value destruction to consistent value creation. A recovery phase began after 2021, characterized by a steady increase in both absolute economic profit and the efficiency of revenue generation relative to the cost of capital.
- Economic Profit Trends
- A substantial turnaround is observed in economic profit, which moved from a deficit of 91.8 million US dollars in 2021 to a surplus of 666.4 million US dollars by 2025. The most rapid period of growth occurred between 2022 and 2023, where economic profit more than doubled, indicating a sharp increase in the company's ability to generate returns above its weighted average cost of capital.
- Adjusted Revenue Growth
- Revenue exhibited a consistent upward trend throughout the period, rising from 7.58 billion US dollars in 2021 to 11.93 billion US dollars in 2025. This sustained growth in the top line provided the necessary scale to support the expansion of economic profit.
- Economic Profit Margin Expansion
- The economic profit margin reflects an improving efficiency profile, expanding from -1.21% in 2021 to 5.59% in 2025. The transition to a positive margin in 2022 marks the point where the business began creating economic value. The subsequent climb to 5.59% suggests that profit growth outperformed revenue growth, indicating improved operational leverage and capital efficiency.
The correlation between rising adjusted revenue and an expanding economic profit margin indicates that the organization successfully scaled its operations while simultaneously improving its return on invested capital. The progression suggests a maturing phase of value creation where incremental revenue is contributing disproportionately to economic profit.
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