Chipotle Mexican Grill: Financial Analysis

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Executive summary Chipotle Mexican grill has had positive growth over the last 2 years. All ratios used in this financial analysis provided us with the information to conclude that Chipotle is a profitable market. By looking at the stock price chart, on, over the last 3 years we can observe the trends of Chipotle and evaluate how the stock price has increased consistently. The stock price nearly tripled in the last 3 years and is currently taking a dip in the market. Overall, our financial analysis has shown promising results through all the ratios used, telling us that Chipotle Mexican Grill is consistently profitable and effective at managing its assets and investments. Since Chipotle Mexican Grill is currently taking …show more content…
It is important to note that all ratios in this section of the financial statement analysis exhibited an increase from 2013 and 2014. The first ratio used was the return on common stockholder equity, which in 2013 showed a 23.47% return of common stock holder equity and 25.09% return of common stock holder equity in 2014. In 2013 the companies return on total assets was 16.92% and in 2014 it increased to 18.85%, representing the company is increasing its profits by effectively using their assets. The final ratio used to measure the profitability of Chipotle in our financial statement analysis is the profit margin. Our profit margin ratio shows us a result of 10.2% and increases to 10.8% in 2014. This represents the amount of profit Chipotle makes based on the cost of goods sold. While the percentage is not particularly high, the increase shows us that the profits are not diminishing.
The Market Prospects of Chipotle were fairly complicated to observe due to the lack of information available on the annual cash dividends per sale. Because of this, we were unable to obtain a dividend yield for Chipotle. However, using the price-earnings ratio we were able to observe that in 2013 the ratio showed us a result of 61.43 which is relatively high, while in 2014 it was 42.73. This decrease
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The Company has vowedto only have GMO free ingredients which, alongside their gluten free options, gives health food fanatics a favorite fast food restaurant. The chain restaurant shows consistency in putting its costumers first which has clearly paid off since it has seen consistent growth patterns in its current ratio over the last 4 years (Marketwatch). The companies return to common stockholders’ equity ratio has also seen great results in the last 2 years, ending 2013 with 3.04% return to common stockholders’ equity and ending 2014 with an even better 3.29% return to common stockholders’ equity (found in financial statement analysis spreadsheet). This means the company is proven to be efficient at generating profits from their stockholders’ investments. On Nov. 1st, 2015, Chipotle Mexican Grill inc. began to shut down stores across the U.S. from fear of E. Coli contamination. The stock has taken a clear hit from this in the last few days and experts believe it could cut chipotles earnings by 5%. Chipotle has taken the correct steps by immediately closing over 40 stores and recalling all of their beef. (Swanson, Jim) This represents the stores commitment to not only the safety of their costumers but also their shareholders by preventing this to escalate into a bigger