Fin 320 Milestone 1
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Uploaded by BailiffIceGoldfinch21
Ryan Kut Professor Spicer
Principles of Finance
13 March 2024
The business I chose for my final project is Chipotle Mexican Grill. Chipotle is a restaurant chain that serves its customers burritos, burrito bowls, quesadillas, tacos, salads, and drinks. They were founded on July 13, 1993. They are originally an American based company that has since grown to having over 3,400 locations between the U.S, U.K, Canada, Germany, and France. Using Mergent Online
, I was able to discover Chipotles financial statements.
As of 12/31/2023
USD
Total Assets
8,044,362,000
Total Liabilities
4,982,155,000
Current Assets
1,620,713,000
Current Liabilities
1,030,625,000
Net Income
1,228,737,000
Shares Outstanding
27,426,000
Earnings Per Share
44.34
Total Revenue
9,871,649,000
Shareholder’s Equity
3,062,207,000
Financial statements are very important to a business. They help the financial manager learn the health of the business and determine how to increase the value of the firm. The income
statement will report the revenues, expenses, and profits. The balance sheet will show assets, liabilities, and stockholders’ equity. The cash flow statement will portray cash received and cash spent. The statement of shareholders’ equity shows activity in the common and preferred stock account, retained earnings, and changes to shareholders’ equity. “Analyzing a firm’s financial statements can help managers carry out three important tasks: assess current performance, monitor and control operations, and plan and forecast future performance” (Titman et al.). The objective of a financial statement analysis is to assess a firm’s financial condition. For financial control, managers utilize financial statements in order to monitor and control the operations of a firm. Financial forecasting and planning use the statements to describe the firm’s operations and create a plan. Analyzing financial statements will promote the health of the firm because managers will be able to recognize the areas that need improvement and works towards fixing them before they hurt the firm. Cash flow management is an important part of running every business. It is not important just for profitability, but long-term survival as well. Without managing cash flow properly, a company may eventually go out of business causing them to have to liquidate their inventory. Knowing how to make the correct decisions in regards to spending and generating revenue is very important. Poor cash flow management is one area many small businesses struggle with. “
The most frequent reason that small businesses fail is cash flow management issues, with 82% of failed small businesses citing cash flow problems as a primary factor” (Messenger, 2024)
. Improving cash flow management can happen by engaging in multiple different steps. These steps include sending invoices quickly and collecting outstanding debts, weekly cash forecasts, minimizing variable costs if possible, leasing expensive machinery, and developing multiple
sales channels. By engaging in these, a company will be able to improve their cash flow and decrease their chances of going out of business.
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Works Cited
Mergent. (n.d). Chipotle Mexican Grill Inc
[Company Profile]. www.mergentonline.com/login.php. Accessed 13 Mar. 2024.
Messenger, Special to the News. “BBB: Cash Flow Tips for Businesses.” Marshall News Messenger
, 29 Feb. 2024, www.marshallnewsmessenger.com/business/bbb-cash-flow-
tips-for-businesses/article_7273f930-d5a2-11ee-9819-7f85fa159e3d.html. Accessed 13 Mar. 2024.
Titman, Sheridan, et al. “Pearson+.” Plus.pearson.com
, plus.pearson.com/courses/urn:xl-
hed:course:7775864/products/FLLFUHL5GKZ/pages/
aeb824aaef89f0cb80120a71fc673cae1b4f56a74-id_toc146?
locale=&isTpi=Y&redirectURL=plus.pearson.com/bookshelf&userPreferredType=read. Accessed 13 Mar. 2024.
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