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Chipotle Mexican Grill Financial Position
Finance & Accounting
Pages 3 (753 words)
Chipotle Mexican Grill Name Institution Chipotle Mexican Grill Financial Analysis Profitability Ratio Analysis (MSN, 2012) Ratio Formula 2008 2009 2010 Gross profit margin Gross Profit / Net Income 450.9/78.2 =5.7660 553.1/126.8 = 4.3620 692.3/179 = 3.8676 Net profit margin Net income/ Sales 78.2/ 1332 =0.0587 126.8/1518.4 =0.0835 179/1835.9 =0.0975 Cash Flow Margin Cash flow/ Net Sales -63.13/1332 = -0.0474 131.52/1518.4=0.0866 5.27/1,1835.9= 0.00445 Return on Assets Ratio Net income/ total average asset 78.2/ (201.84 +211.07/2) = 0.3788 126.8/ (211.07 + 297.45/ 2) = 0.4987 179 / (297.45 + 406.22/ 2) = 0.5094 Return on Equity Ratio Net income/ average stockholders’ equity 78.2 / ( 562.11 +
More so, the return on equity that is evidently increasing in Chipotle Mexican Grill gives a close watch for the keen investors, as it is based on a strong measure that determines the ability of the management to create value for its shareholders. The return on equity ratio of Chipotle Mexican Grill in 2008 stands at 0.1320 and it increases in the year 2009 to 0.1912 and to a further increase in 2010 to 0.2364. This shows an improvement in the company’s performance, as it is indicates an increase in the rate of return on the shareholders equity that is going up steadily over the years. More than often, the return on assets ratio gives a measure of effective and efficient utilization of assets in order to produce net profit. It therefore, allows the management an opportunity to enhance the utilization of resources around the company. ...
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