Chapter 2, Problem 2.2ADM

Chipotle: Horizontal analysis

Chipotle Mexican Grill, Inc. is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s balance sheets for the end of two recent years are as follows:

	Chipotle Mexican Grill, Inc Balance Sheets December 31 (in thousands)
		Year 2	Year 1
Assets Current assets
Cash		$ 419,465	$ 323,203
Accounts receivable, net—		34,839	24,016
Inventory		15,332	13,044
Other current assets		70,251	51,073
Investments		338,592	254,971
Total current assets		$ 878,479	$ 666307
Property, plant, and equipment		1,106,984	963,238
Long-term Investments		496,106	313,863
Other assets		64,716	65372
Total assets		$2,546,285	$2,009,280
Liabilities and Stockholders’ Equity Current liabilities
Accounts payable		$ 69,613	$ 59,022
Other current liabilities		176,097	140,206
Total current liabilities		$ 245,710	$ 199,228
Long-term liabilities		288,206	271,764
Total liabilities		$ 533,916	$ 470,992
Stockholders' Equity
Common stock		$ 354	$ 352
Additional paid-in capital		1,038,932	919,840
Retained earnings		1,722,271	1,276,897
Treasury stock		(748,759)	(660,421)
Other adjustments		(429)	1,620
Total stockholders’ equity		$2,012,369	$1,538,288
Total liabilities and stockholders’ equity		$2,546,285	$2,009,280

• A. Prepare a horizontal analysis of the two balance sheets. (Round percentages to one decimal place.)
• B. Interpret the horizontal analysis with respect to the change in total assets, total liabilities, and total stockholders’ equity. (Treasury stock will be discussed in a later chapter and may be omitted from your analysis.)