Refer to the income statements for Chipotle and Panera Bread reproduced at the back of the book.

Required
1. Which is the largest expense for each company in the most recent year? What is its dollar amount? Explain why this might be the largest expense given the nature of each company’s business.
2. One of the accounts on each company’s income statement is ‘‘General and administrative expenses.’’ For each of the two most recent years, compute the ratio of this expense to Total revenues for each company. Did this ratio increase or decrease from one year to the next for each company? Which company has the lower ratio in each of the two years?
3. Compute the ratio of income tax expense (Chipotle uses the term ‘‘Provision for income taxes’’) to income before income taxes for the two most recent years for each company. Did this ratio increase or decrease from one year to the next for each company? Which company has the lower ratio for each of the two years?