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Chipotle Name: You are a senior financial analyst for Chipotle and the new VP of Finance has asked for you to develop a high- level analysis of performance for the past two years (2019 vs 2018) and...

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Chipotle
    Name:
    You are a senior financial analyst for Chipotle and the new VP of Finance has asked for you to develop a high- level analysis of performance for the past two years (2019 vs 2018) and has provided a template of information and analysis he needs to get ‘up-to-speed’ on as part of preparation for an upcoming meeting.
    Make logical connections where some metrics influence other metrics as part of the analysis. The analysis should be concise but highlight any key information about the ratios and trends.
    Company Selected: Chipotle
    Ratio/Metric     2019    2018    Analysis
    Revenue Growth
    Revenue Growth
    Income Statement Analysis
    Gross Profit Margin            High Level Analysis:
    Operating Margin
    Tax Rate
    Profit Margin
    ROA and ROIC & Analysis
    ROA            High Level Analysis:
    ROIC
    Income Statement Vertical Analysis (Common Size)
        2019    2018    High Level Analysis:
    Revenue    100%    100%
Answered Same DayMar 20, 2022

Solution

Sandeep answered on Mar 21 2022
70 Votes
Chipotle
    Name:
    You are a senior financial analyst for Chipotle and the new VP of Finance has asked for you to develop a high- level analysis of performance for the past two years (2019 vs 2018) and has provided a template of information and analysis he needs to get ‘up-to-speed’ on as part of preparation for an upcoming meeting.
    Make logical connections where some metrics influence other metrics as part of the analysis. The analysis should be concise but highlight any key information about the ratios and trends.
    Company Selected: Chipotle
    Ratio/Metric     2019    2018    Analysis
    Revenue Growth
    Revenue Growth        8.68%    Revenue has jumped to $5.6 bn showing increase of 6% compared with 2018.The primary reason being large strides in implementing digital technology that allows customers to order online and pick up at the store as e-commerce sales increase , comparable restaurant sales which has spiked by 12% in 2019 and in 2018 by 5 %. Part of this is attributed to reworking of menu prices,committiment to invest in the modifying their digital platform,upgrading its digital capabilities through rolling out of digital pickup shelves, digital-make lines and expanding delivery capabilities .
        14.83%
    Income Statement Analysis
    Gross Profit Margin    34.07%    32.70%    Company's COGS was $ 3.64 bn in 2019 against $3.32 bn registering a jump of 2% in absolute terms mainly due to increase in revenue due to more selling items which leads to extra buying of material .The cost of raw material like protein, avocados, beverages increased by 33.1% which was offset by menu price increase , while labour and occupancy being other compoents which declined in 2019 by .07% and .06%...
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