Chapter 3, Problem 3.2ADM

Chipotle: Vertical 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 (in thousands):

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		338592	254971
Total current assets		$ 878,479	$ 666,307
Property, plant, and equipment		1,106,984	963,238
Long-term investments		496,106	313,863
Other assets		64716	65872
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

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