Q1. Review the following accounts, subtotals, and totals; (1) describe your observations; and then (2) identify what your observations indicate. A response is given for Cash and Cash Equivalents to help with understanding.
a. Cash and Cash Equivalents. more than tripled from $88 million in 2008 to $401 million in 2011 and from being 10% of total assets in 2008 to more than 25% of total assets in 2011, indicating this company is cash rich!
b. Noncurrent assets. ___________________________________________________________
____________________________________________________________________________________________________________________________________________________________
c. Total assets. ________________________________________________________________
d. Total liabilities. _____________________________________________________________
e. Retained earnings... ___________________________________________________________
f. Stockholders€™ equity... _________________________________________________________
Q2. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B €“ Ratios.

* Industry: Restaurants €”Industry ratio averages from money.msn.com
For each ratio, (a) compare the two years of ratios and circle the ratio indicating lower financial risk, (b) cross out any ratio indicating greater financial risk than the industry norm, and (c) comment on the results.
Q3. Overall, the balance sheet and related ratios indicate a (_________/ steady / weakening) financial position. Why? List observations that support your conclusion and explain why.
Q4. Revenues were _________ million for the earliest year reported and _________million for the most recent year reported. Since the earliest year reported, this account has changed by _________ million, which is a ________ (_________/ decrease). During the same time period, COGS (_________/ decreased) by _________total operating expenses (other than COGS) (_________/ decreased) by _________resulting in net income (_________/ decreasing) by _________
Q5. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B €“ Ratios.

* Industry: Restaurants €”Industry ratio averages from money.msn.com
For each ratio, (a) circle the stronger company ratio, (b) cross out any company ratio that is weaker than the industry norm, and (c) comment on the results.
Q6. The income statement and related ratios indicate (______________ / steady / weakening) earnings potential. Why? List observations that support your conclusion and explain why.
Q7. During 2011, the primary source of cash was (______________/ issuing debt / issuing capital stock) and the primary use of cash was (purchasing PPE / ______________/paying dividends).
For investments, there was a net cash outflow during (_________ / _________ / 2009 / _________), indicating that more investments were (_________ / sold).
A net cash outflow for capital stock occurred during (_________/ _________/ _________/ _________), meaning more capital stock was (issued / _________). Repurchased common stock is referred to as (common / preferred / _________) stock. Treasury stock (increases / _________) total stockholders€™ equity on the balance sheet and decreases total shares outstanding, which is (_________/ unfavorable) for shareholders because earnings per share (_________/ decreases).
Q8. Compute the ratios requested in the chart below. For ratio formulas and explanation refer to Appendix B €“ Ratios.

For each ratio, (a) circle the company ratio indicating the least amount of risk and (b) comment on the results.
Q9. The statement of cash flows reports a net increase in cash during (_________ / _________ / _________ / 2008). The statement of cash flows and related information report a (_________ / steady / weakening) cash position. Why? List observations that support your conclusion and explain why.
Q10a.Complete the statement of retained earnings below.

b. Retained earnings increased during (_______ / _______ / _______).
Q11. Based on the financial statements presented for Chipotle, would you invest in this company? (______ / No) Why? Support your response with at least five good observations.

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Chipotle Industry Norm12/31/2011 12/31/2008 Current ratio 1.3 Debt ratio 66% Chipotle Industry Norm 12/31/2011 12/31/2008 ROS ROA ROE Gross profit margin Accounts receivable tunover Inventory tumover Asset tumover 14.0 % 14.0 % 37.8 % 33.5 % 71.2 1.2 Chipotle RATIOS Industry Norm NA NA NA NA 2011 2008 Free cash flow Cash flow adequacy Cash flow liquidity Quality of income Chipotle STATEMENT OF RETAINED EARNINGS (S in millions) For the years ended December 31, 2011 2010 2009 Retained eamings, beginning Net income Dividends paid Other adjustments Retained earnings, ending 2008 78 0 S 151