Finance

Week 2 Practice Set for Section II of the Chipotle 10K Name

Please read the Management Discussion and Analysis (MDA) section of the 10K, review the financial statements, and review the additional Excel spreadsheet with the historical and common sized income statements. As always, please do your own work and do not share your work with others. Please answer the following questions in the spaces provided below:

1. Chipotle had comparable sales (for restaurants open at least 12 months) increases of

_____________% during 2024 and ___________% during 2023. They attributed much of this increase to what?

1. Food beverage and packaging cost as a percentage of sales were _______29.8______% during 2024 and ____29.5_______% during 2023. After reviewing the attached Excel common sized history, how do these most recent two years relate to the historical trend?

Are management’s explanations for the cause of the change likely to persist (or repeat) in the future?

Do you expect these costs to be higher, lower or the same in the future? Why?

1. Labor costs as a percentage of sales were _____24.7________% during 2024 and _____24.7______% during 2023.

After reviewing the attached Excel common sized history, how do these most recent two years relate to the historical trend?

Are management’s explanations for the cause of the change likely to persist (or repeat) in the future?

Do you expect these costs to be higher, lower or the same in the future? Why

1. Other Operating costs were ____13.9_______% during 2024 and ____14.5_____% during 2023.

After reviewing the attached Excel common sized history, how do these most recent two years relate to the historical trend?

Are management’s explanations for the cause of the change likely to persist (or repeat) in the future?

Do you expect these costs to be higher, lower or the same in the future? Why?

1. General and Administrative expenses were ______6.2_______% during 2024 and ____6.4_____% during 2023.

After reviewing the attached Excel common sized history, how do these most recent two years relate to the historical trend?

Are management’s explanations for the cause of the change likely to persist (or repeat) in the future?

Do you expect these costs to be higher, lower or the same in the future? Why?

1. From the Statement of Cash Flows, Chipotle generated how much in operating cash flow in 2024 ________ in 2023 ________in 2022_________

How do you explain this large increase in cash flow from operations?

1. Chipotle used how much cash flow to purchase leasehold improvements, property, and equipment in 2024 ________ in 2023 ________in 2022__________

Besides opening new restaurants, how is Chipotle spending this money in a strategic way to increase future cash flow at some existing restaurants?

1. How would you characterize Chipotle’s liquidity position? Why?
2. What is Chipotle’s single largest asset?
3. What were Chipotle’s 1st and 2nd largest expense items?