CHIPOTLEBy Catherine Mangan, Eric Roth, Benjemin Gilsdorf, Daniela Dedvukaj, Jesse Montie, Angelina Pechota

Executive Summary Chipotle is a company that has made a

strong, positive impact on the fast food market. Because of the strategic planning that Chipotle has incorporated throughout the production process from going healthy and organic, the company has been and continues to be successful. The financial and popularity increase can be seen throughout the following data and figures from 2011-2013.

History: Timeline of Chipotle 1993-First Chipotle opened at a former Dolly Madison ice cream location. 1995-Added second and third Chipotle locations. 1996-Opened five more Denver area restaurants. 1998-Chipotle brings on outside investors. 1999-First Chipotles opened outside of Colorado: Minneapolis, MN and Columbus, OH. 1999-Steve Ells learns about the way most pork is raised in the US. Decides to do

things in a different way. 2000-Started serving naturally raised pork. As of 2010, 100% of Chipotle is naturally

raised. 2002-Started serving naturally raised chicken. Chipotle now gets 100% of their

chicken from farms that meet their high standards. 2004-Ahead of the curve, Chipotle starts using zero trans-fat frying oil. 2006-Chipotle goes public on New York Stock Exchange. 2007-Over 60% of Chipotle’s beef is naturally raised. They now serve 100% naturally

raised beef in their restaurants. 2007-Chipotle stops using cheese or sour cream with rBGH. 2008-As of 2010, 40% of Chipotle’s black beans are certified organic and their local

food initiative takes off. 2009-Steve Ells testifies before Congress to try to eliminate the use of antibiotics in

ranching.Source: http://www.chipotle.com/en-us/chipotle_story/chipotle_story.aspx

History-Letter from the CEO When I opened the first Chipotle in Denver, Colorado I certainly didn’t have any intention of opening

more than just one restaurant. I just wanted to build a place where you could eat delicious food made of the finest ingredients quickly and affordably. As it turns out, it was an idea people could get behind.

As Chipotle began to grow and expand, I learned quite a bit about the way most of the food in the US is produced and processed --- and what I learned was pretty grim. Pigs are raised in stark confinement, produce is grown on vast factory farms with little or no regard for the environment, and dairy cows are confined and injected with hormones that can make them ill in an effort to increase their milk production.

But I also learned that there is a better way. I met ranchers and farmers dedicated to raising livestock and growing produce using responsible, respectful, and sustainable techniques. By partnering with these producers we have increased the amount of naturally raised meats and responsibly grown produce we purchase exponentially.

We are proud of our accomplishments, but there is still a long way to go.

"Food with Integrity" is our commitment to always look closer, dig deeper, and work harder to ensure that our actions are making things better, not worse. It’s our promise to run our business in a way that doesn’t exploit animals, people or the environment. It is the philosophy that guides every decision we make at Chipotle.

Thanks for your support, and check back on our progress. We are excited about what the future holds. 

 Steve Ells

Source: http://www.chipotle.com/en-us/chipotle_story/steves_story/steves_story.aspx

Balance Sheet in millions

Chipotle Balance Sheet

Date: 12/31/2013 (in millions)

Assets 2013 2012 2011Current Assets      

Cash And Equivalents 323.2 322.60 401.2 Accounts receivable 24.0 16.80 8.4 Other Receivables 3.7 9.60 - Inventory 13.0 11.10 8.9 Prepaid expenses 34.2 27.40 21.4 Short-term investments 255.0 150.30 55.0 Deferred Tax Assets, Current 13.2 8.90 6.2

Total current assets 666.3 546.70 501.1 Fixed (Long-Term) Assets      

Gross Property Plant And Equipment 1,490.6 1,311.60 1,122.1 Accumulated Depreciation (527.4) (444.90) (370.2)

Total fixed assets 963.2 866.70 751.9 Other Assets      

Goodwill 21.9 21.90 21.9 Long-Term Investments 313.9 190.90 128.2 Other Long-Term Assets 43.9 42.60 22.0

Total Other Assets 379.7 255.40 172.1

Total Assets 2,009.2 1,668.80 1,425.1

Balance Sheet ContinuedLiabilities and Owner's Equity      Current Liabilities      

Accounts payable 59.0 58.70 46.4 Accrued Expenses 108.7 105.40 88.7 Current taxes payable - - 4.2 Unearned revenue 31.5 22.70 18.0 Current portion of Long-Term Debt/Capital Lease - - 0.1 Current portion of Capital Lease Obligations - - 0.1

Total current liabilities 199.2 186.80 157.5 Long-Term Liabilities      

Capital Leases - - 3.5 Deferred income tax 55.4 48.90 64.1 Other Non-Current Liabilities 216.3 186.90 155.7

Total long-term liabilities 271.7 235.80 223.3 Total Common Equity      

Common Stock 0.4 0.30 0.3 Additional Paid In Capital 919.8 816.60 676.7 Retained Earnings 1,276.9 949.50 671.5 Treasury Stock (660.4) (521.50) (304.4)Comprehensive Income and Other 1.6 1.30 0.2

Total owner's equity 1,538.3 1,246.20 1,044.3

Total Liabilities and Owner's Equity 2,009.2 1,668.80 1,425.1 {42} {42}

Common Financial Ratios 2013 2012 2011Debt Ratio (Total Liabilities / Total Assets) 0.23 0.25 0.27Current Ratio (Current Assets / Current Liabilities) 3.34 2.93 3.18Working Capital (Current Assets - Current Liabilities) 467 360 344 Assets-to-Equity Ratio (Total Assets / Owner's Equity) 1.31 1.34 1.36

Acid test or Quick Ratio (Cash + Accounts Rec/Current Liabilities) 1.74 1.82 2.60

Debt-to-Equity Ratio (Total Liabilities / Owner's Equity) 0.31 0.34 0.36

Balance Sheet Continued The larger the current ratio, the more liquid the firm and the current ratio should

be at least greater than one and preferably close to two. Chipotle has been higher than two for the past three years meaning it would be easier for the firm to repay its short-term liabilities with the cash raised from the sale of its short-term assets.

Chipotle's Quick Ratio has been considerably high compared to the industry average which is .63. The stronger the balance sheet for Chipotle with them having a higher number. Quick Ratio measures proportion of their cash and short-term investments to their current liabilities. This ratio displays the ability to pay current liabilities with their cash and short-term investments to Chipotle's current liabilities.

Working Capital has increased over the past three years giving them more long-term financing available to fund the firm's operating cycle after they have funded their long-term strategic investment in fixed assets.

Another strong number for this company is their Debt-to-Equity Ratio. Industry average sits at .74 with Chipotle not getting any higher than a .36 in the past three years. This number indicates how much a company owes of total Debt for one dollar of stockholder's equity. The lower the number, the stronger the balance sheet for Chipotle.

Source: http://csimarket.com/stocks/CMG-Financial-Strength-Comparisons.html

Income Statement in millions

Chipotle Income StatementFor the Years Ending [Dec 31, 2013, Dec 31, 2012 and Dec 31, 2011]

Revenue 2013 2012 2011Sales revenue 3,214.6 2,731.2 2,269.5

Total Revenues 3,214.6 2,731.2 2,269.5 Cost of Goods Sold 2,012.4 1,704.3 1,429.1

Gross Profit 1,202.2 1,026.9 840.4

ExpensesSelling General & Admin Expenses, Total 263.6 230.3 189.8 Depreciation & Amortization, Total 96.1 84.1 74.9 Other Operating Expenses 303.0 251.6 219.3

Total Expenses 662.7 566.0 484.0 Operating Income 539.5 460.9 356.4

Interest expense - - (0.9) Interest And Investment Income 1.8 1.8 -

NET INTEREST EXPENSE 1.8 1.8 (0.9) EBT, EXCLUDING UNUSUAL ITEMS 541.3 462.7 355.5

Gain *Loss) On Sale of Assets (6.8) (5.0) (5.8) EBT, INCLUDING UNUSUAL ITEMS 534.5 457.7 349.7

Income Tax Expense 207.0 179.7 134.8 Earnings From Continuing Operations 327.4 278.0 214.9

NET INCOME TO COMMON INCLUDING EXTRA ITEMS 327.4 278.0 214.9 NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 327.4 278.0 214.9

{42} [42] [42]

Net Income 327.4 278.0 214.9

Income Statement Continued Chipotle's financials overall are growing. Revenue is increasing

due to approximately 518 additional stores being opened in the past three years, which means additional expenses as well as increased tax expense. Their average restaurant sales were $2.169 million as of December 31, 2013, increasing from $2.113 million as of December 31, 2012. Last year Sales increased at a rate of 17% but Expenses increased by the same amount of 17% meaning a break even occurred, no profit. The year before Sales increased by approximately 20% with expenses only increasing 17%. There are no significant changes in Gross Profit, Operating Profit, or Income Tax Expense and they do not pay dividends. Retained earnings are steady with an average increase of 40.6% over the past three years.

Source: http://csimarket.com/stocks/CMG-Financial-Strength-Comparisons.html

Managerial Balance Sheet2011:Investment Capital = 456.2 - 90.2 + 752.0 = 1118.00Capital Employed = 381.1 + 1044.2 = 1425.3WCR = 44.9 - 135.1 = -90.2Net Fixed Assets = 752.0 2012:Investment Capital = 472.9 - 90.3 + 866.7 = 1249.3Capital Employed = 422.7 + 1245.9 = 1668.6WCR = 73.8 - 164.1 = -90.3Net Fixed Assets = 866.7 2013:Investment Capital: 578.2 - 79.6 + 963.2 = 1461.8Capital Employed: 471.0 + 1538.3 = 2009.3WCR: 88.1 - 167.7 = -79.6Net Fixed Assets: 963.2Managerial Balance Sheet

Chipotle’s Managerial Balance Sheet for 2011-2013 

December 31, 2011

December 31, 2012

December 31, 2013

Invested Capital Cash Working capital

requirement (WCR) Net fixed assets

 401.2-79.6963.2

 322.6-90.3866.7

 323.2-90.2752.0

Total invested capital 1461.8 1249.3 1118.0Capital employed Short-term debt Long-term financing

Long-term debtOwners’ equity

 381.1

1044.2 0.1 1044.2

 422.7

1245.9 -- 1245.9

 471.0

1538.3 -- 1538.3

Total capital employed 1425.3 1668.6 2009.3

How has the Working Capital Requirement changed?

Can you see the trend? Even as the cash flow increases, the amount of money required to run the business also increases, which means Chipotle isn't really managing to pull ahead with their current systems.

Liquidity Importance

Assessing liquid assets are valuable for determining a firm’s overall cash value. This monetary assessment can be used for preventative measures during times of low cash on hand, and for the development of future endeavors. It is essential that a firm covers the WCR for the benefit of its shareholders and attractiveness in investment.Hawawini, G., & Viallet, C. (2011). Finance for executives: managing for

value creation. (4th ed.). Mason, OH: South-Western Cengage Learning.

Liquidity: Net Investments in the Operating Cycle and Financing (figures in millions)

79.6 90.3 90.2

81.1 379.2 786.3

-20.1 100.1 147.8

101.9% 419.9% 871.7%

-25.2% 110.9% 163.9%

[786.3 / 90.2]

[-20.1 / 79.6] [100.1 / 90.3] [147.8 / 90.2]Net Short-term Financing / WCR (in percentage)

[.1 + 1044.2 - 963.2] [0 + 1245.9 - 866.7] [0 + 1538.3 - 752.0]

[381.1 - 401.2] [422.7 - 322.6] [471.0 - 323.2]

[81.1 / 79.6] [379.2 / 90.3]

Working Capital Requirement (WCR)

The Financing of the Operating Cycle

Net Short-term Financing = Short term debt - Cash

Net Long-term Financing / WCR (in percentage)

Net Long-term Financing = Long term financing + Owner Equity - Net Fixed Assets

2011 2012 2013

Liquidity: Ratio Conclusions In 2011, The Liquidity of Chipotle could only cover 76.7% of

the Working Capital Requirement. The company’s Net long-term financing options were at 101.9%, but Net short-term financing options were in negative numbers, at -25.2%

However, the company has seen dramatic growth in liquidity in 2012 and 2013, as the distance has grown substantially between net short-term and long-term financing. From 2012 to 2013, long-term financing increased by $292.4M, and net fixed assets decreased, causing the WCR to decrease by .10M

As of 2013, Chipotle’s Net Long-term financing can cover nearly nine times the WCR, with Net-Short term financing covering 163.9%. This possibly suggests a positive position in regard to liquidity, with the long-term financing almost entirely made up of owner equity. A buyer may like to see more consistent trending for a safer investment.

Liquidity Continued

3.5% 3.3% 2.8%

160.6 times 153.5 times

1.3 days 2.2 days 2.7 days

11.8 days 12.5 days 10.7 days

Accounts Payable / Average Daily Purchases *365 days in a year

[46.4 / (1429.1 + 1.8/365)]* [58.7 / (1704.3 + 2.2 / 365)] [59.0 / (2012.4 + 1.9 / 365)]

* The 1.8 f igure comes from the 2011 inventory minus the 2010 inventory (8.9 - 7.1).

Industry Standard = 11%

154.8 times

Accounts Receivable / Average Daily Sales *365 days in a year

[8.4 / (2269.5 / 365)] [16.8 / (2731.2 / 365)] [24 / (3214.6 / 365)]

[79.6 / 2269.5] [90.3 / 2731.2] [90.2 / 3214.6]

Cost of Good Sold / Inventories (Turnover Rate)

*Industry Standard based on 2008 projections from Haw aw ini, G., & Viallet, C. (2011). Finance for executives:managing for value creation. (4th ed.). Mason, OH: South-Western Cengage Learning.

[2012.4 / 13.0][1704.3 / 11.1][1429.1 / 8.9]

Industry Standard = 11% Industry Standard = 11%

WCR as Percentage of Sales2011 2012 2013

WCR / Sales (in percentage)

Liquidity Continued WCR as a Percentage of Sales

Based on the figures shown, Chipotle is investing much less in its operating cycles than the industry standard, and the WCR is continually taking less of the percentage of sales. This is indicative of efficient use of working capital.

Efficiency in the Management of Inventories Chipotle has a high inventory turnover rate, which is a

necessity due to the nature of their business. Chipotle specializes in serving organic, naturally sustainable foods, so a high turn over rate would be required in order to keep a fresh product.

Source: https://www.chipotle.com/en-us/fwi/fwi.aspx

Liquidity Continued Efficiency in the Management of

Accounts Receivable By taking the figure for Accounts Receivable and dividing

it by the Average Daily Sales, we can figure out the efficiency of Accounts receivable. Chipotle happens to be efficient as their product is relatively inexpensive, but their rate has dropped in efficiency over the past three years. This could be attributed to the increase in number of locations and the prevalent use of credit cards.

Efficiency in the Management of Accounts Payable Chipotle has seen increased efficiency in the amount of

time it takes to pay their bills from 2012 – 2013. It is suggested that the average collection period should not exceed 15 days.

Source: http://johanhburger.com/financial-analysis/

Managerial Influence on Working Capital Requirement (WCR)

Inventory turnover=Cost of Goods Sold (COGS)/ending inventories

2011= $1,429.1 / 8.9 = 160.57 2012= $ 1,704.3 / 11.1 = 153.54 2013= $ 2,012.4 / 13.0 = 154.80 The higher the inventory turnover, the

lower the firm’s investment in inventories and the higher the efficiency with which the firm manages its inventories.

Managerial Influence on Working Capital Requirement (WCR) Cont’d

Average collection period = Ending Accounts receivable / Average daily sales. 2011 = 8.4 / 6.22 = 1.35 Avg. Daily sales = (2,269.5 /

365) = 6.22 2012 = 16.8 / 7.48 = 2.25 Avg. Daily sales = (2,731.2 /

365) = 7.48 2013 = 24.0 / 8.81 = 2.72 Avg. Daily sales = (3,214.6 /

365) = 8.81 Average collection period is the number of days’

worth of sales that have not yet been collected at the date of the balance sheet.

Managerial Influence on Working Capital Requirement (WCR) Cont’d

Average payment period = Ending accounts payable / average daily purchases 2011 = 46.4 / 3.92 = 11.84 Avg. Daily purchases =

(1,429.1 / 365) 2012 = 58.7 / 4.67 = 12.57 Avg. Daily purchases =

(1,704.3 / 365) 2013 = 59 / 5.51 = 10.71 Avg. Daily purchases =

(2,012.4 / 365) The average payment period is the number of days’ worth of

purchases that have not yet been paid at the date of the balance sheet.

 

Cash Flow Statements: Net Operating Cash Flow

Sources: http://www.marketwatch.com/investing/stock/cmg/financials/cash-flow http://www.business.uconn.edu/users/smf/accounting%20for%20deferred%20taxes.doc

Operations 2013 2012 2011

Net Earnings 327.4 278.0 215.0Depreciation and Ammortization 96.1 84.1 74.9Deferred Taxes 2.1 -18.1 11.3Other Funds 32.6 -2.3 11.8Change in Working Capital Requirement (WCR) 70.6 78.2 98.1Net Operating Cash Flow 528.7 420.0 411.1

Chipotle shows that it can create a large amount of Operating Cash Flow and it is currently trending upward. This is an indicator that the store operations are capable of generating income.

In 2012, Chipotle incurred cost in regard to deferred taxes. This is likely to allow for the depreciation of value in newly acquired assets, such as the purchase of land or buildings.

Cash Flow Statements: Investment Activities

Investing Activities 2013 2012 2011Capital Expenditures

Fixed Assets -199.9 -197.0 -151.2Other Assets 0.0 0.0 0.0

Purchase/Proceeds of InvestmentsPurchase of Investments -387.6 -213.4 -183.8Proceeds from investment securities 159.3 55.0 124.8

Net Cash Flow from Investing Activities -428.3 -355.4 -210.2

Source: http://www.marketwatch.com/investing/stock/cmg/financials/cash-flow

Chipotle is incurring increased expenses in Investing Activities because they are expanding their operations. This is also reflected by the overall increases in Operating Cash Flow, due to more restaurants being opened, and Liquidity. By increasing the amount of investments and following the market trend, this could be an opportunity for the consumer to invest at a lower price and wait for Chipotle’s cost of expansion rate to plateau.

Cash Flow Statements: Financing Activities

Financing Activities 2013 2012 2011Cash Dividends Paid

Common/Differed 0.0 0.0 0.0Change in Stock

Repurchase of Common Stock -138.9 -217.1 -63.5Sale of Common Stock 0.3 0.5 0.6

Issuance/Reduction of DebtLong-Term Debt 0.0 -0.1 -0.1

Other FundsUses 38.2 73.2 38.7Sources -0.1 0.0 0.0

Net Cash Flow from Financing Activities -100.5 -143.5 -24.3Exchange Rate Effect 0.5 0.4 -0.2Net Cash and Cash Equivalents 0.6 -78.7 176.4

End of Year Cash and Cash Equivalencies 0.5 -157.62 353.0

Source: http://www.marketwatch.com/investing/stock/cmg/financials/cash-flow

Cash Flow Statements Continued

Financing Activities Chipotle has not paid out any dividends from 2011-2013,

indicating that it would not be wise to invest if one was looking for a quick return. Chipotle has continued a trend of repurchasing stock, likely because the company feels as though the stock is undervalued. This could be an indicator of an anticipated rise in stock value.

End of Year Cash and Cash Equivalencies With the purchase of new investments and repurchase of

common stock, the End of the Year Cash and Cash Equivalencies are not large numbers. The Operating Cost of Capital is currently struggling to keep up with expenses. Chipotle may have to consider slowing down their rate of expansion and pay dividends in order to keep investors interested.

Dann, L. Y. (1980). Common stock repurchases: An analysis of returns to bondholders and stockholders. Journal of Financial Economics, 9, 113-138. Retrieved from http://schwert.ssb.rochester.edu/f423/jfe81_ld.pdf

Cash Flow Statements: Free Cash Flow

260.0 222.9 328.9Free Cash Flow (in millions)

2011 2012 2013

Sources: http://www.marketwatch.com/investing/stock/cmg/financials/cash-flow Hawawini, G., & Viallet, C. (2011). Finance for executives: managing for value creation.

(4th ed.). Mason, OH: South-Western Cengage Learning.

The Free Cash Flow (FCF) does not take into account the financing activities of a firm when measuring a firm’s cash flow. This is for the purpose of placing value solely on the operating and investing practices of the organization. Chipotle declined in Free Cash Flow in 2012, mainly because of the increase in investments and drastic decrease from the proceeds of investment securities.

Profitability, Risk and Growth Return on equity = Earnings after tax

(EAT) / Owners Equity (OE) 2011 = 214.9 / 1044.2 = 20.58% 2012 = 278 / 1245.9 = 22.31% 327.5 / 1538.3 = 21.29%

Profitability, Risk and Growth Cont’d

Invested capital = cash + WCR + net fixed assets

2011 = 456 + -96 + 752 = 1112 2012 = 472.9 + -99 + 866.7 =

1240.6 2013 = 578.2 + -92.8 + 963.2 =

1448.6

Profitability, Risk and Growth Cont’d

Return on invested capital before tax (ROICbt) = EBIT / invested capital

2011 = 356.4 / 1112 = 32.1 % 2012 = 460.9 / 1240.6 = 37.2 % 2013 = 539.5 / 1448.6 = 37.2 %

Other Measures of Profitability

Share price as of March 31, 2014=495.50

Earnings per share, using the March data aboveequals10.53

Chipotle’s debt to equity ratio=30%

SSGR=0.21 million for 2013

Present Value Given current stock pricing (495.50) and

expected dividends an investment of $500,000 in this company with a 3% cost of capital and sale of stock at the end of 5 years would be recommended.

Reason investment would be recommended:

In 2010=90.18 dollars per share In 2014=495.50 dollars per share

Financial Cost Ratio Financial cost ratio = Earnings before

tax (EBT) / EBIT 2011 = 355.5 / 356.4 = .997 ~1 2012 = 462.7 / 460.9 = 1.004 ~ 1 2013 = 541.3 / 539.5 = 1.003 ~ 1

EBIT/interest Times – interest – earned ratio = EBIT /

interest expense 2011 = 356.4 / -.9 = -396 2012 = 460.9 / 1.8 = 256.05 2013 = 539.5 / 1.8 = 299.72

Financial Structure Ratio Financial structure ratio = invested

capital / owners equity 2011 = 1112 / 1044 = 1.07 2012 = 1240.6 / 1245.9 = .9957 2013 = 1448.6 / 1538.3 = .9416

Financial Leverage Multiplier Financial leverage multiplier = financial

cost ratio x financial structure ratio 2011 = .997 x 1.07 = 1.07 2012 = 1.004 x .9957 = .99 2013 = 1.003 x .9416 = .94

ROE How does your firm’s ROE compare to

industry average? 2011 = 20.58% 2012 = 22.31 % 2013 = 21.29 % Industry average ~ 12% and

McDonald’s ROE for 2013 = 31.5%

Using expected dividends and current market price of common stock to calculate payback, is this a good investment?

Chipotle does not pay dividends, N/A. Calculate the internal rate of return for

this investment of $500,000. With the same 5 year investment with a

3% cost of capital, what is the profitability index for the $500,000 proposed project?

Firm considering raising $15,000,000 for a project

Is this viable?-Would take on large debt, does not generate large amount

of revenue and net income (would take 5+ years to pay back for this investment). What would the project be for? What is the risk involved? These questions need to be asked.

1,000 par-value bonds, 10 year maturity, and a coupon of $80 per yr. what would the market value of securities be?

-Market value =469.90 If the firm could borrow at 3% above current govt. bond

rates, what would be the cost of debt?-Cost of debt= 8%+3%=11%

Continued

At a marginal tax rate of 40%, what is after-tax cost of debt? (=cost of debt x(1-tax rate))

-11% x (1-.40)= 6.6% If the cost of debt is 3% and the cost of equity is

8%; the $15,000,000 project is funded with $10M in equity and $5M in long-term debt, what is the WACC?

-3% x (1-.11) x 33%) + (8% x 67%) = 6.3% rounded up

Capital Structure Using the principles outlined in Chapter 11, does the

firm you are analyzing have a suitable capital structure? - The financial leverage multiplier is low, so that means

Chipotle is a pretty strong company and does not need to rely so much on creditors to finance. Chipotle also has many tangible assets which means if need be, creditors are more likely to extend credit to the company if financial distress were to occur. Chipotle is a stable and growing company. A lot of judgment is needed when analyzing capital structure because there is not one specific formula/ratio that tells everything. The goal is to maximize value and share price.

Continued If you were the CFO of the firm you are

analyzing, would you recommend changes to the capital structure?

-The company does not have much debt in its current structure. If the company can take on more debt in the future, it could possibly grow faster and provide more money for shareholders. That could be something to look into as the company continues to strengthen.

In Conclusion… In conclusion, with the trending financial

increase in the company as seen on the balance and managerial balance sheets, cash flow statements and throughout the formulas that have been displayed, we find that Chipotle is a successful company that would be a good investment.