Investors and lenders who read financial statements must determine the age, composition, and productivity of operating assets.

Question:

Investors and lenders who read financial statements must determine the age, composition, and productivity of operating assets.

Refer to the financial information at the back of the book for Chipotle and Panera Bread.

Required

Part A. The Ratio Analysis Model

For each company, determine:

Replicate the five steps in the Ratio Analysis Model on page 378 to perform the analysis.

1. Formulate the Question

2. Gather the Information from the Financial Statements

3. Calculate the Ratio

4. Compare the Ratio with Other Ratios

5. Interpret the Ratios

Part B. The Business Decision Model

1. Formulate the Question

2. Gather Information from the Financial Statements and Other Sources

3. Analyze the Information Gathered

4. Make the Decision

5. Monitor Your Decision

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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