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Chipotle Financial Analysis Essay

440 Words2 Pages

customers. The final value is added with good employees, great customer service and environment friendly practices and locations. According to the financial analysis Chipotle has a good performance. Asset turnover ratio of 1.592 in 2011 has decreased from 2010 but it still shows that Chipotle is able to convert its assets into sales very quickly. Inventory turnover ratio has decreased from 189.7 in 2010 to 188.6 in 2011 which shows that they have more inventories now but are still able to turn it over very efficiently. Liquidity ratios, Quick ratio and current ratio are well above 1 which signifies good financial performance. Current ratio of 2.75 in 2007 improved to 3.183 in 2011 but decreased from 3.301 in 2010 to 3.183 in 2011 which could be a problem in a long-run but now it’s still good compared to the industry levels. There is an upward trend when it comes to earnings per share which makes it more favorable for the investors and shareholders to invest in the company and get a good return on the investment. The profitability margins show that Chipotle is very profitable. Operating margin …show more content…

Chipotle’s operating income increased from $108.2 million in 2007 to $350.6 million in 2011 equal to CARG of 34.2%. Chipotle’s operating profit margin was 15.4% in 2011, 15.7% in 2010, 13.4% in 2009, 10% in 2007. Net income increased from $70.6million in 2007 to $214.9 million in 2011 a CAGR of 32.1%. EPS was $2.13per diluted share in 2007 and in 2011 was $6.76 per diluted share in 2011, a CAGR of 33.5%. Net cash provided by operating activities has been increasing from $146.9million in 2007 to $411.1 million in 2011, a CAGR of 29.3%. Average annual sales for the restaurants that have been opened at least 12months have increased from 1.085million in 2007 to 2.013million in 2011 which has a CAGR of 16.1%. The comparable restaurant sales increases of 11.2%, 9.4%, 2.2%, 5.8% and 10.8% are very

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