Question

Please write a one-page analytical paper describing the liquidity and profitability positions of Chipotle Mexican Grill, Inc. as of the year ended December 31, 2017. You should state a conclusion about both liquidity and profitability and support those conclusions with specific information from the financial statements and the appropriate ratio analysis.

Answer 1

Annual Income Statement: (USD)	2017
Sales	$          4,476.12
Cost of Goods Sold:	$          3,720.20
Gross Profit	$              755.92
Research And Development Expenses	-
S&A Expenses	296.388
Other Operating Income or Expenses	-25.686
Operating Expenses	4205.618
Operating Income	270.7939
Total Non- Operating Income/Expenses	4.949
Pre-Tax Income	275.743
Income Taxes	99.49
Income After Taxes	176.253
Other Income	-
Income From Continuous Operations	176.253
Net Income	176.253
EBITDA	434.142
EBIT	270.7939

Annual Balance Sheet: (USD)	2007
Current Assets
Cash On Hand	508.951
Notes And Loans Receivable	-
Inventory	19.86
Total Current Assets	629.535
Property, Plant, And Equipment	1338.366
Long-Term Investments	-
Goodwill And Intangible Assets	21.939
Other Long-Term Assets	55.852
Total Long-Term Assets	1416.157
Total Assets	2045.692
Total Current Liabilities	323.893
Other Non-Current Liabilities	40.042
Total Lon Term Liabilities	357.354
Total Liabilities	681.247
Common Stock Net	0.359
Retained Earnings	2397.064
Comprehensive Income	-3.659
Other Share Holders Equity	-
Share Holder Equity	1364.445
Total Liabilities And Share Holders Equity	2045.692

Particulars	2017	Observations
Liquidity Ratio
Current Ratio	1.9437	Current ratio can be defined as a liquidity ratio that measures a company's ability to pay short-term obligations.
Quick Ratio	2.11	Ideal Quick Ratio is considered to be 1:1, so that the firm is able to pay off all quick assets wit no liquidity problem. 2017 Quick ration indicates that the company does not have enough cash to pay off its current liabilities. however, it is at par with the industry average
Profitability Ratio
Return On Equity	13%	ROE measures the management availability to generate profit from equity available to it. This ratio is not as good as compared to the past. Also compared to the industry standards, where industry average return on equity is ~19%, this company ROE is ~13%
Net Profit Margin	4%	Net Profit Marin is an indicator of financial health. This ratio of the company is quite low in comparison to the industry average of ~7.5%
Return On Assets	9%	Return on assets can be defined as an indicator of how profitable a company is relative to its total assets. this ratio is as at par with the industry
EPS - Earnings Per Share	6.17	This ratio indicates own much company is earning per face value of ordinary are. This ratio is also as compared to past