Chipotle Case

Besides the 2013 year, the tax rate has been increasing. I do not doubt that the tax rate will rise next year for Chipotle. An increase in the tax rate every year means that Chipotle is making more money every year. So the higher the tax rate the better because it is a positive change. Chipotle is definitely increasing their financial capacity every year. The last trend to look at is the dividend payout rate. The only problem is that Chipotle does not distribute yearly dividends. Instead the money is retained and invested back into the company. This amount of money is put in the retained earnings amount under total shareholder equity. The 2013 Financial Report has a 5 year graph depicting the retained earnings from

The most important ratio is the Earnings per share which is calculated by the following formula: . Since Chipotle does not distribute dividends, than the dividend part of the equation is removed. The formula used for Chipotle’s EPS will then be: Net Income/ Average Outstanding Shares. All the data for the calculations will be retrieved from page 44 of the 2013 Chipotle Financial Report. The total Net Income was 327,438(in thousands) and the average outstanding shares were 30,957 shares basic and 31,281 shares diluted. This totals a Basic EPS of 10.58 and a diluted EPS of 10.47. These are both good numbers because they show that the earnings are a positive value and are in double digits. The reason EPS is so important is that it shows investors and the market that you are making earnings and that will determine whether more investors invest in the company. Since the EPS for Chipotle is in double digits, there should be no reason not to invest in this

The population is very large and the customer base in the United States compare favorably with the ethnicities in Mexico. Chipotle is Mexican Food, so it should no doubt be a “must go to” restaurant in Mexico. Since the cost of living in Mexico is much less, Chipotle will not incur such a heavy cost of a subsidiary in Mexico comparing it to a country in Europe. These are very good reasons to expand our product to Mexico. However it is important to conduct an evaluation of the expansion of business to