Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 2, Problem 2.2ADM
Chipotle: Horizontal analysis
Chipotle Mexican Grill, Inc. is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s
Chipotle Mexican Grill, Inc Balance Sheets December 31 (in thousands) | |||
Year 2 | Year 1 | ||
Assets Current assets |
|||
Cash | $ 419,465 | $ 323,203 | |
Accounts receivable, net— | 34,839 | 24,016 | |
Inventory | 15,332 | 13,044 | |
Other current assets | 70,251 | 51,073 | |
Investments | 338,592 | 254,971 | |
Total current assets | $ 878,479 | $ 666307 | |
Property, plant, and equipment | 1,106,984 | 963,238 | |
Long-term Investments | 496,106 | 313,863 | |
Other assets | 64,716 | 65372 | |
Total assets | $2,546,285 | $2,009,280 | |
Liabilities and Stockholders’ Equity Current liabilities |
|||
Accounts payable | $ 69,613 | $ 59,022 | |
Other current liabilities | 176,097 | 140,206 | |
Total current liabilities | $ 245,710 | $ 199,228 | |
Long-term liabilities | 288,206 | 271,764 | |
Total liabilities | $ 533,916 | $ 470,992 | |
Stockholders' Equity | |||
Common stock | $ 354 | $ 352 | |
Additional paid-in capital | 1,038,932 | 919,840 | |
Retained earnings | 1,722,271 | 1,276,897 | |
(748,759) | (660,421) | ||
Other adjustments | (429) | 1,620 | |
Total stockholders’ equity | $2,012,369 | $1,538,288 | |
Total liabilities and stockholders’ equity | $2,546,285 | $2,009,280 |
- A. Prepare a horizontal analysis of the two balance sheets. (Round percentages to one decimal place.)
- B. Interpret the horizontal analysis with respect to the change in total assets, total liabilities, and total stockholders’ equity. (Treasury stock will be discussed in a later chapter and may be omitted from your analysis.)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Current Position Analysis
The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$446,900
$372,400
Marketable securities
517,400
419,000
Accounts and notes receivable (net)
211,700
139,600
Inventories
1,071,800
807,000
Prepaid expenses
552,200
516,000
Total current assets
$2,800,000
$2,254,000
Current liabilities:
Accounts and notes payable
(short-term)
$324,800
$343,000
Accrued liabilities
235,200
147,000
Total current liabilities
$560,000
$490,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Current Year
Previous Year
1. Working capital
$fill in the blank 1
$fill in the blank 2
2. Current ratio
fill in the blank 3
fill in the blank…
Return on Total Assets
A company reports the following income statement and balance sheet information for the current year:
Net income
$418,290
Interest expense
73,810
Average total assets
3,700,000
Determine the return on total assets. If required, round the answer to one decimal place.fill in the blank 1 %
Forecasting an Income StatementAutoZone Inc. reports the following income statements.
Consolidated Statement of Income ($ in Thousands)
12 Months EndedAug. 27, 2016
Net sales
$10,635,676
Cost of sales, including warehouse and delivery expenses
5,026,940
Gross profit
5,608,736
Operating, selling, general and administrative expenses
3,548,341
Operating profit
2,060,395
Interest expense, net
147,681
Income before income taxes
1,912,714
Income tax expense
671,707
Net income
$1,241,007
Forecast AutoZone's 2017 income statement assuming the following income statement relations ($ in thousands). All percentages, (other than sales growth and provision for income taxes) are based on percent of net sales.
Net sales growth
6%
Cost of sales, including warehouse and delivery expenses
47.3%
Operating, selling, general and administrative expenses
33.4%
Interest expense, net
$145,000
Income tax expense (% pretax income)
35%
Round your…
Chapter 2 Solutions
Corporate Financial Accounting
Ch. 2 - What is the difference between an account and a...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - eCatalog Services Company performed services in...Ch. 2 - If the two totals of a trial balance are equal,...Ch. 2 - Assume that a trial balance is prepared with an...Ch. 2 - Assume that when a purchase of supplies of 2,650...Ch. 2 - Assume that Muscular Consulting erroneously...Ch. 2 - Assume that Sunshine Realty Co. borrowed 300,000...Ch. 2 - Checking accounts are one of the most common forms...
Ch. 2 - Rules of debit and credit and normal balances...Ch. 2 - Prob. 2.2BECh. 2 - Journal entry for fees earned Prepare a journal...Ch. 2 - Journal entry for dividends Prepare a journal...Ch. 2 - Missing amount from an account On August 1, the...Ch. 2 - Trial balance errors For each of the following...Ch. 2 - Correcting entries The following errors took place...Ch. 2 - Prob. 2.1EXCh. 2 - Chart of accounts Innerscape Interiors is owned...Ch. 2 - Chart of accounts LeadCo School is a newly...Ch. 2 - Rules of debit and credit The following table...Ch. 2 - Normal entries for accounts During the month,...Ch. 2 - Normal balances of accounts Identify each of the...Ch. 2 - Transactions Zenith Consulting Co. has the...Ch. 2 - Journalizing and posting On October 3, 2018, Regal...Ch. 2 - Transactions and T accounts The following selected...Ch. 2 - Cash account balance During the month, Warwick Co....Ch. 2 - Account balances A. During February, 186,500 was...Ch. 2 - Retained earnings account balance As of January 1,...Ch. 2 - Identifying transactions Napa Tours Co. is a...Ch. 2 - Journal entries Based upon the T accounts in...Ch. 2 - Trial balance Based upon the data presented in...Ch. 2 - Trial balance The accounts in the ledger of...Ch. 2 - Effect of errors on trial balance Indicate which...Ch. 2 - Total of Credit column: 525,000 Error in triad...Ch. 2 - Effect of errors on trial balance The following...Ch. 2 - Errors in trial balance Identify the errors in the...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Prob. 2.22EXCh. 2 - Entries into T accounts and trial balance Marjorie...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance On November 1,...Ch. 2 - Journal entries and trial balance Elite Realty...Ch. 2 - Corrected trial balance The Lexington Group has...Ch. 2 - Entries into T accounts and trial balance Ken...Ch. 2 - Journal entries and trial balance On August 1,...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance Valley Realty...Ch. 2 - Corrected trial balance Tech Support Services has...Ch. 2 - The transactions completed by PS Music during June...Ch. 2 - Continuing Company AnalysisAmazon: Horizontal...Ch. 2 - Chipotle: Horizontal analysis Chipotle Mexican...Ch. 2 - Prob. 2.3ADMCh. 2 - Prob. 2.4ADMCh. 2 - Prob. 2.1TIF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Analyze Chipotle Mexican Grill Chipotle Mexican Grill, Inc. (CMG) is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotles income statements through operating income for two recent years are as follows (in thousands): a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place. b. Interpret the vertical analysis.arrow_forwardReturn on total assets A company reports the following income statement and balance sheet information for the current year: Net income $266,220 Interest expense 46,980 Average total assets 4,350,000 Determine the return on total assets. If required, round the percentage to one decimal place. %arrow_forwardMultiple-Step Income Statement and Report Form of Balance Sheet The following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8: Cash $187,875 Retained Earnings (as of Sept. 30, 20Y7) $ 571,050 Accounts Receivable 337,500 Dividends 281,250 Inventory 850,500 Sales 8,025,750 Estimated Returns Inventory 78,750 Cost of Goods Sold 4,893,750 Office Supplies 33,750 Sales Salaries Expense 874,800 Prepaid Insurance 27,000 Advertising Expense 103,275 Office Equipment 259,200 Depreciation Expense— Store Equipment 18,675 Accumulated Depreciation— Office Equipment 111,375 Miscellaneous Selling Expense 4,500 Store Equipment 1,150,875 Office Salaries Expense 174,150 Accumulated Depreciation— Store Equipment 420,075 Rent Expense 89,775 Accounts Payable 109,350 Insurance Expense 51,638 Customer Refunds Payable…arrow_forward
- Problem 1 LAKELAND Company has Sales of $2,250,000. The cost of goods sold for the year were 65% of Sales and Company's year-end balance sheets is shown below : Assets LAKELAND Company Balance Sheet 2021 Cash Accounts receivable Marketable securities Inventories Plant and Equipment Total Assets (100%)... $1,000,000 For the year ended December 31, 2021, assume all sales are on credit, and 360 days per year. Required to Compute the following Ratio: 5% 27% 8% 25% 35% Required: 1. Current ratio. 2. Quick ratio. 3. Debt-to-total assets ratio. 4. Assets turnover. 5. Inventory turnover. Liabilities and Stockholders' Equity Accounts payable Accrued taxes = 23% 8% 12% 12% 20% 25% Bond payable (long term) Common Stock Paid- in- Capital Retained Earning Total Liabilities and SOE (100%)... $1,000,000 Problem 2 Assume that you need to borrow $180,000 from local bank to invested on the department store and consider a 2 years loan with Semiannual payment with the interest rate 8% per year. a. What is…arrow_forwardStatement of financial position of Fernandez Co The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year. Cash $250,000 Retained Earnings 2,850,000 Accounts Receivable 1,197,000 Dividends 50,000 Inventory 1,790,000 Sales 9,350,000 Estimated Returns Inventory 23,500 Cost of Goods Sold 5,840,000 Office Supplies 14,000 Sales Salaries Expense 820,000 Prepaid Insurance 8,500 Advertising Expense 350,000 Office Equipment 870,000 Depreciation Expense-Store Equipment 120,000 Accumulated Depreciation-Office Equipment 580,000 Miscellaneous Selling Expense 58,000 Store Equipment 2,600,000 Office Salaries Expense 550,000 Accumulated Depreciation-Store Equipment 820,000 Rent Expense 104,000 Accounts Payable 336,000 Depreciation Expense-Office Equipment 60,000 Customer Refunds Payable 39,000 Insurance Expense 50,000 Salaries Payable 43,000 office Supplies Expense 26,000 Notes Payable (long-term) 200,000 Miscellaneous Administrative…arrow_forwardJuroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.arrow_forward
- Suppose that you are given the following data for Niles Company : Note: The data and calculations are based on a 365-day year. Cash and equivalents Fixed assets Sales Net income Current liabilities Current ratio DSO ROE The current ratio is equal to assets value of Return on equity (ROE) is to approximately $225,000 $650,000 $2,500,000 $112,500 $240,000 2.5 18.25 12.00% The days sales outstanding (DSO) ratio is equal to accounts receivable balance of Plugging in the relevant values for the current ratio and current liabilities, and then solving yields a current . Adding fixed assets to current assets yields a value of total assets of Recall the following identity: Recall that Total Assets = Total Liabilities and Equity. Plugging in the relevant values for ROE and net income yields a value of total common equity of Mathematically, total liabilities and equity is equal to ▼. Plugging in the relevant values for total liabilities and equity, current liabilities, and equity (calculated…arrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous YearCurrent assets: Cash $577,600 $448,800 Marketable securities 668,800 504,900 Accounts and notes receivable (net) 273,600 168,300 Inventories 601,900 442,900 Prepaid expenses 310,100 283,100 Total current assets $2,432,000 $1,848,000 Current liabilities: Accounts and notes payable (short-term) $440,800 $462,000 Accrued liabilities 319,200 198,000 Total current liabilities $760,000 $660,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current…arrow_forwardReturn on Total Assets A company reports the following income statement and balance sheet information for the current year: Net income $661,910Interest expense 116,810Average total assets 6,280,000Determine the return on total assets. If required, round the answer to one decimal place.fill in the blank 1 %arrow_forward
- Current Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash $498,200 $384,000 Marketable securities 576,800 432,000 Accounts and notes receivable (net) 236,000 144,000 Inventories 1,047,400 805,200 Prepaid expenses 539,600 514,800 Total current assets $2,898,000 $2,280,000 Current liabilities: Accounts and notes payable (short-term) $400,200 $420,000 Accrued liabilities 289,800 180,000 Total current liabilities $690,000 $600,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year 1. Working capital $fill in the blank 1 $fill in the blank 2 2. Current ratio fill in the blank 3 fill in the blank 4…arrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash $395,200 $324,000 Marketable securities 457,600 364,500 Accounts and notes receivable (net) 187,200 121,500 Inventories 617,800 411,800 Prepaid expenses 318,200 263,200 Total current assets $1,976,000 $1,485,000 Current liabilities: Accounts and notes payable (short-term) $301,600 $315,000 Accrued liabilities 218,400 135,000 Total current liabilities $520,000 $450,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year 1. Working capital %24 2. Current ratio 3. Quick ratioarrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash $465,100 $354,000 Marketable securities 538,600 398,300 Accounts and notes receivable (net) 220,300 132,700 Inventories 1,032,200 683,800 Prepaid expenses 531,800 437,200 Total current assets $2,788,000 $2,006,000 Current liabilities: Accounts and notes payable (short-term) $394,400 $413,000 Accrued liabilities 285,600 177,000 Total current liabilities $680,000 $590,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. Current Year Previous Year 1. Working capital $fill in the blank 1 $fill in the blank 2 2. Current ratio fill in the blank 3 fill in the blank 4 3.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License