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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Chipotle Mexican Grill Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	1,403,018)	1,025,991)	788,934)	613,981)	515,617)
Cost of capital²	15.69%	15.37%	15.40%	15.50%	15.03%
Invested capital³	6,006,837)	5,396,406)	5,496,598)	4,937,915)	4,227,370)

Economic profit⁴	460,574)	196,477)	(57,450)	(151,559)	(119,859)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,403,018 – 15.69% × 6,006,837 = 460,574

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Chipotle Mexican Grill Inc. economic profit increased from 2021 to 2022 and from 2022 to 2023.

Chipotle Mexican Grill Inc., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	1,228,737)	899,101)	652,984)	355,766)	350,158)
Deferred income tax expense (benefit)¹	(17,130)	(39,671)	(19,829)	101,401)	27,286)
Increase (decrease) in allowance for credit losses²	1,562)	(770)	362)	1,581)	7)
Increase (decrease) in unearned revenue³	26,609)	26,720)	28,601)	32,555)	24,721)
Increase (decrease) in restructuring liability⁴	—)	—)	—)	(30)	(3,470)
Increase (decrease) in equity equivalents⁵	11,041)	(13,721)	9,134)	135,507)	48,544)
Interest expense	—)	—)	—)	—)	—)
Interest expense, operating lease liability⁶	206,633)	177,988)	160,526)	155,327)	147,994)
Adjusted interest expense	206,633)	177,988)	160,526)	155,327)	147,994)
Tax benefit of interest expense⁷	(43,393)	(37,378)	(33,711)	(32,619)	(31,079)
Adjusted interest expense, after taxes⁸	163,240)	140,611)	126,816)	122,708)	116,915)
Net operating profit after taxes (NOPAT)	1,403,018)	1,025,991)	788,934)	613,981)	515,617)

Based on: 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), 10-K (reporting date: 2019-12-31).

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 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 4,051,625 × 5.10% = 206,633

⁷ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 206,633 × 21.00% = 43,393

⁸ Addition of after taxes interest expense to net income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Chipotle Mexican Grill Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Chipotle Mexican Grill Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision (benefit) for income taxes	391,769)	282,430)	159,779)	(61,985)	108,127)
Less: Deferred income tax expense (benefit)	(17,130)	(39,671)	(19,829)	101,401)	27,286)
Add: Tax savings from interest expense	43,393)	37,378)	33,711)	32,619)	31,079)
Cash operating taxes	452,292)	359,479)	213,319)	(130,767)	111,920)

Based on: 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), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Chipotle Mexican Grill Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Chipotle Mexican Grill Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating lease liability¹	4,051,625)	3,731,410)	3,520,314)	3,157,052)	2,851,513)
Total reported debt & leases	4,051,625)	3,731,410)	3,520,314)	3,157,052)	2,851,513)
Shareholders’ equity	3,062,207)	2,368,023)	2,297,374)	2,020,135)	1,683,026)
Net deferred tax (assets) liabilities²	89,109)	98,623)	141,765)	149,422)	37,814)
Allowance for credit losses³	2,742)	1,180)	1,950)	1,588)	7)
Unearned revenue⁴	209,680)	183,071)	156,351)	127,750)	95,195)
Restructuring liability⁵	—)	—)	—)	—)	30)
Equity equivalents⁶	301,531)	282,874)	300,066)	278,760)	133,046)
Accumulated other comprehensive (income) loss, net of tax⁷	6,657)	7,888)	5,354)	4,229)	5,363)
Adjusted shareholders’ equity	3,370,395)	2,658,785)	2,602,794)	2,303,124)	1,821,435)
Construction in Progress⁸	(161,721)	(123,453)	(107,222)	(76,317)	(45,422)
Debt investments⁹	(1,253,462)	(870,336)	(519,288)	(445,944)	(400,156)
Invested capital	6,006,837)	5,396,406)	5,496,598)	4,937,915)	4,227,370)

Based on: 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), 10-K (reporting date: 2019-12-31).

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.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Chipotle Mexican Grill Inc. invested capital decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Chipotle Mexican Grill Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	71,857,173)	71,857,173)	÷	75,908,798)	=	0.95	0.95	×	16.35%	=	15.47%
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					15.69%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	44,388,308)	44,388,308)	÷	48,119,718)	=	0.92	0.92	×	16.35%	=	15.08%
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					15.37%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	43,771,887)	43,771,887)	÷	47,292,201)	=	0.93	0.93	×	16.35%	=	15.13%
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					15.40%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	43,468,508)	43,468,508)	÷	46,625,560)	=	0.93	0.93	×	16.35%	=	15.24%
Operating lease liability³	3,157,052)	3,157,052)	÷	46,625,560)	=	0.07	0.07	×	4.92% × (1 – 21.00%)	=	0.26%
Total:	46,625,560)					1.00					15.50%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	23,713,842)	23,713,842)	÷	26,565,355)	=	0.89	0.89	×	16.35%	=	14.59%
Operating lease liability³	2,851,513)	2,851,513)	÷	26,565,355)	=	0.11	0.11	×	5.19% × (1 – 21.00%)	=	0.44%
Total:	26,565,355)					1.00					15.03%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Chipotle Mexican Grill Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	460,574)	196,477)	(57,450)	(151,559)	(119,859)
Invested capital²	6,006,837)	5,396,406)	5,496,598)	4,937,915)	4,227,370)
Performance Ratio
Economic spread ratio³	7.67%	3.64%	-1.05%	-3.07%	-2.84%
Benchmarks
Economic Spread Ratio, Competitors⁴
Airbnb Inc.	13.13%	14.55%	-7.71%	-114.01%	—
Booking Holdings Inc.	16.90%	6.00%	-11.41%	-11.10%	30.55%
McDonald’s Corp.	8.87%	6.07%	8.48%	4.22%	8.46%
Starbucks Corp.	9.38%	6.96%	8.22%	-4.50%	-0.08%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 460,574 ÷ 6,006,837 = 7.67%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Chipotle Mexican Grill Inc. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

Chipotle Mexican Grill Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	460,574)	196,477)	(57,450)	(151,559)	(119,859)

Revenue	9,871,649)	8,634,652)	7,547,061)	5,984,634)	5,586,369)
Add: Increase (decrease) in unearned revenue	26,609)	26,720)	28,601)	32,555)	24,721)
Adjusted revenue	9,898,258)	8,661,372)	7,575,662)	6,017,189)	5,611,090)
Performance Ratio
Economic profit margin²	4.65%	2.27%	-0.76%	-2.52%	-2.14%
Benchmarks
Economic Profit Margin, Competitors³
Airbnb Inc.	7.53%	11.48%	-6.94%	-174.56%	—
Booking Holdings Inc.	9.03%	4.79%	-15.63%	-23.78%	22.35%
McDonald’s Corp.	17.41%	11.89%	17.43%	10.27%	17.10%
Starbucks Corp.	5.80%	4.43%	6.70%	-4.39%	-0.06%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × 460,574 ÷ 9,898,258 = 4.65%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Chipotle Mexican Grill Inc. economic profit margin improved from 2021 to 2022 and from 2022 to 2023.

Chipotle Mexican Grill Inc. (NYSE:CMG)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin