Question

Analyze Chipotle Mexican Grill Chipotle Mexican Grill, Inc. (CMG) is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle's income statements through operating income for two recent years are as follows (in thousands): Chipotle Mexican Grill, Inc. Income Statements For the Years Ended December 31 (in thousands) Year 2 Year 1 Revenues $3.904,384 $4,501 223 Expenses: Food, beverage, packing $1,365,580) $(1,503,835) Labor (1,105,001) (1,045,726) Rent (occupancy) (293,636) (262,412) General and administrative (641,963) (514,963) Other (463,647) (410,698) Total expenses $(3.800,817) $(3,737.634) Operating income $34,567 $763,589 Required: a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place Chipotle Mexican Grill, Inc. Income Statements For the Years Ended December 31

Answer 1

Income statement
	Year 2		Year1
	Amount	%	Amount	%
Revenue	3904384	100.00%	4501223	100.00%
Expenses:
Food beverage packing	-1365580	-34.98%	-1503835	-33.41%
Labor	-1105001	-28.30%	-1045726	-23.23%
Rent	-293636	-7.52%	-262412	-5.83%
General and admin cost	-641953	-16.44%	-514963	-11.44%
Other	-463647	-11.88%	-410698	-9.12%
Total expenses	-3869817	-99.11%	-3737634	-83.04%
Operating income	34567	0.89%	763589	16.96%

In Vertical Analysis : Percentage is calculated by dividing specific item with sales i.e. Food beverage packing = Cost of Food & Beverage packing/ Sales

All the statement are correct