Exercise 12-4 Chipotle Mexican Grill began with a single location in 1993 and no

Question

Exercise 12-4 Chipotle Mexican Grill began with a single location in 1993 and now operates more than 1,700 restaurants. Adapted versions of the company's income statements (in $000s) are as follows: 2015 2014 Revenue $4,501,223 $4,108,269 Restaurant operating costs Food, beverage, and packaging Labor Occupancy Other operating costs General and administrative expenses Depreciation and amortization Pre-opening costs Loss on disposal of assets 1,503,835 1,420,994 1,045,726 904,407 262,412 230,868 514,963 434,244 250,214 273,897 110,474 15,609 6,976 3,737,634 3,397,469 710,800 3,503 769,867 714,303 294,265 268,929 $475,602 $445,374 130,368 16,922 13,194 Total operating expenses Income from operations Interest and other income (expense), net Income before income taxes Provision for income taxes 763,589 6,278 Net income

Explanation / Answer

Common Size Income Statement: 2015 2014 Revenue 100.00% 100.00% Restaurant Operating cost Food Beverage and Packaging 33.41% 34.59% Labor 23.23% 22.01% Occupancy 5.83% 5.62% Other Operating cost 11.44% 10.57% General and Admin expense 5.56% 6.67% Depreciation and Amortization 2.90% 2.69% Pre-opening Cost 0.38% 0.38% Loss on Disposal of asset 0.29% 0.17% Total Operating cost 83.04% 82.70% Income from operations 16.96% 17.30% Interest and Other incomes 0.14% 0.09% Income Before Income tax 17.10% 17.39% Provision for Income tax 6.54% 6.55% Net Income 10.57% 10.84%

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