Market Cap : 47.71 B | Enterprise Value : 49.72 B | PE Ratio : 64.37 | PB Ratio : 22.17 |
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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Chipotle Mexican Grill's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 17.64%.
As of today (2022-08-16), Chipotle Mexican Grill's WACC % is 9.51%. Chipotle Mexican Grill's ROIC % is 13.52% (calculated using TTM income statement data). Chipotle Mexican Grill generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
The historical data trend for Chipotle Mexican Grill's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Restaurants subindustry, Chipotle Mexican Grill's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Restaurants industry and Consumer Cyclical sector, Chipotle Mexican Grill's ROIC % distribution charts can be found below:
* The bar in red indicates where Chipotle Mexican Grill's ROIC % falls into.
Chipotle Mexican Grill's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:
ROIC % (A: Dec. 2021 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2020 ) | + | Invested Capital (A: Dec. 2021 )) | / count ) |
= | 824.234 * ( 1 - 19.66% ) | / | ( (4946.379 | + | 5694.556) | / 2 ) |
= | 662.1895956 | / | 5320.4675 | |||
= | 12.45 % |
where
Invested Capital | (A: Dec. 2020 ) | |||||||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | Excess Cash | |||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | ( Cash, Cash Equivalents, Marketable Securities | - | max(0, Total Current Liabilities | - | Total Current Assets | + | Cash, Cash Equivalents, Marketable Securities | )) |
= | 5982.896 | - | 438.479 | - | ( 951.603 | - | max(0, 822.199 | - | 1420.237 | + | 951.603 | )) |
= | 4946.379 |
Invested Capital | (A: Dec. 2021 ) | |||||||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | Excess Cash | |||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | ( Cash, Cash Equivalents, Marketable Securities | - | max(0, Total Current Liabilities | - | Total Current Assets | + | Cash, Cash Equivalents, Marketable Securities | )) |
= | 6652.958 | - | 450.52 | - | ( 1076.319 | - | max(0, 873.682 | - | 1381.564 | + | 1076.319 | )) |
= | 5694.556 |
Chipotle Mexican Grill's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:
ROIC % (Q: Jun. 2022 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Mar. 2022 ) | + | Invested Capital (Q: Jun. 2022 )) | / count ) |
= | 1369.116 * ( 1 - 25.34% ) | / | ( (5726.488 | + | 5862.413) | / 2 ) |
= | 1022.1820056 | / | 5794.4505 | |||
= | 17.64 % |
where
Invested Capital | (Q: Mar. 2022 ) | |||||||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | Excess Cash | |||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | ( Cash, Cash Equivalents, Marketable Securities | - | max(0, Total Current Liabilities | - | Total Current Assets | + | Cash, Cash Equivalents, Marketable Securities | )) |
= | 6467.257 | - | 478.014 | - | ( 856.242 | - | max(0, 833.738 | - | 1096.493 | + | 856.242 | )) |
= | 5726.488 |
Invested Capital | (Q: Jun. 2022 ) | |||||||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | Excess Cash | |||||||
= | Total Assets | - | Accounts Payable & Accrued Expense | - | ( Cash, Cash Equivalents, Marketable Securities | - | max(0, Total Current Liabilities | - | Total Current Assets | + | Cash, Cash Equivalents, Marketable Securities | )) |
= | 6545.336 | - | 468.247 | - | ( 761.617 | - | max(0, 831.623 | - | 1046.299 | + | 761.617 | )) |
= | 5862.413 |
Note: The Operating Income data used here is four times the quarterly (Jun. 2022) data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Chipotle Mexican Grill's WACC % is 9.51%. Chipotle Mexican Grill's ROIC % is 13.52% (calculated using TTM income statement data). Chipotle Mexican Grill generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Chipotle Mexican Grill earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
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Maw Scott Harlan | director | 1411 E. MISSION AVENUE SPOKANE WA 99202 |
Namvar Ali | director | C/O PERSHING SQUARE CAPITAL MANAGEMENT 888 SEVENTH AVENUE, 42ND FLOOR NEW YORK NY 10019 |
Filikrushel Patricia | director | DOLLAR GENERAL CORPORATION 100 MISSION RIDGE GOODLETTSVILLE TN 37072 |
Hickenlooper Robin S | director | 12300 LIBERTY BOULEVARD ENGLEWOOD CO 80112 |
Engles Gregg L | director | 1225 SEVENTEENTH STREET SUITE 1000 DENVER CO 80202 |
Winston Mary A | director | 557 BROADWAY C/O SCHOLASTIC CORP NEW YORK NY 10012 |
Carey Matt | director | 11216 WAPLES MILL ROAD SUITE 100 FAIRFAX VA 22030 |
Gutierrez Mauricio | director | 211 CARNEGIE CENTER PRINCETON NJ 08540 |
Flanzraich Neil | director | 4400 BISCAYNE BLVD MIAMI FL 33137 |
Niccol Brian R | director, officer: Chairman, CEO | 1 GLEN BELL WAY IRVINE CA 92618 |
Brandt Christopher W | officer: Chief Marketing Officer | 2202 NORTH WESTSHORE BLVD TAMPA FL 33607 |
Schalow Laurie | officer: Chief Corp Affairs, Food Sft | 610 NEWPORT CENTER DRIVE SUITE 1300 NEWPORT BEACH CA 92660 |
Andrada Marissa | officer: Chief D&I and People Officer | C/O KATE SPADE & COMPANY 2 PARK AVENUE NEW YORK NY 10016 |
Garner Curtis E | officer: Chief Technology Officer | C/O AEROHIVE NETWORKS, INC. 330 GIBRALTAR DRIVE SUNNYVALE CA 94089 |
Boatwright Scott | officer: Chief Restaurant Officer | 1401 WYNKOOP STREET SUITE 500 DENVER CO 80202 |
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