Financial Statement Analysis Executive Summary:

Select two competing companies from the same industry (I have attached the 2016 financial statements of Chipotle versus Shake Shack), and calculate the following financial ratios for them based on their 2016 financial statements:

1)Return on Equity

2)Return on Assets

3)Profit Margin Ratio

4)Working Capital

5)Current Ratio

6)Quick (Acid-Test) Ratio

7)Debt-to-Equity Ratio

8)Cash Flow from Operations to Total Liabilities Ratio

Discuss from an investor's point-of-view which of the two companies you would rather invest. Please refer to the ratios/measures that you calculated. You may also include information and opinions about other factors (e.g., non-financial factors, market information) that influence your decision.

The executive summary should be approximatetely 1 to 2 pag long, Font size 12, single-spaced. Please print a copy of your summary and bring to class.

CHIPOTLE MEXICAN GRILL, INC. Symbol Currency Scale Source Industry Travel & Leisure Interim Ratios CMG USD 1,000,000 Worldscope 09/30/2017 USD 06/30/2017 USD 03/31/2017 USD 12/31/2016 USD 09/30/2016 USD Market Cap 8,707.6 11,894.2 12,776.6 10,872.1 12,273.9 Net Sales or Revenues 1,128.1 1,169.4 1,068.8 1,034.6 1,037.0 Valuation Measures Total Debt - - 0.0 0.0 0.0 2,064.4 2,068.6 2,062.3 2,026.1 2,067.0 - - 12,199.6 10,454.4 11,914.7 EBITDA 73.7 148.9 - 69.2 - EBIT 32.1 107.8 - 31.1 - - - 57.1 - 65.5 59.7 88.3 136.6 489.7 176.3 Net Assets Enterprise Value Capital Expenditure Valuation Price/Earnings Price/Sales 2.0 2.8 3.1 2.8 3.2 Price/Cash Flow 24.4 33.6 40.9 46.6 40.9 Price/Book Value 6.3 8.2 9.1 7.8 8.5 Price/Tangible BV 6.4 8.3 9.2 7.9 8.6 Enterprise Value/Sales - - 2.9 2.7 3.1 Enterprise Value/EBITDA - - - 56.5 46.6 Enterprise Value /EBIT - - - 269.9 105.4 Enterprise Value /Cash Flow - - 27.8 29.9 31.7 Enterprise Value /Free Cash Flow - - 65.9 115.6 110.3 Total Debt/ Enterprise Value - - 0.0 0.0 0.0 Net Debt/ Enterprise Value - - - - - Total Debt/EBITDA - - - 0.0 0.0 Net Debt/EBITDA - - - NEG NEG EBITDA/Interest Expense - - - - - EBTIDA - Capex / Interest Expense - - - - - EBIT/ Interest Expense - - - - - Quick Ratio 1.8 2.2 2.0 1.6 1.4 Current Ratio 2.0 2.5 2.2 1.9 1.7 10.4 12.3 10.5 11.0 10.8 Long Term Debt / Common Equity - - 0.0 0.0 0.0 Total Debt / Common Equity - - 0.0 0.0 0.0 Long Term Debt / Total Capital - - 0.0 0.0 0.0 Enterprise Value Credit Statistics Liquidity Leverage Cash Flow / Current Liabilities 09/30/2017 USD 06/30/2017 USD 03/31/2017 USD 12/31/2016 USD 09/30/2016 USD Total Debt / Total Capital - - 0.0 0.0 0.0 Working Capital / Total Capital - - 0.3 0.2 0.1 Profitability Ratios Gross Margin 19.75% 22.20% 21.45% 17.21% 17.69% EBITDA Margin 6.53% 12.73% - 6.69% - EBIT Margin 5.58% 5.19% - 0.99% 2.92% Pre-Tax Margin 2.85% 9.22% 6.96% 3.01% 1.00% Net Margin 1.74% 5.71% 4.32% 1.54% 0.75% Sales Per Employee 0.1 0.1 0.1 0.1 0.1 Operating Profit Per Employee 0.0 0.0 0.0 0.0 0.0 Net Income Per Employee 0.0 0.0 0.0 0.0 0.0 Assets Per Employee 0.0 0.0 0.0 0.0 0.0 Efficiency Ratios Total Asset Turnover - - - - - Inventory Turnover 164.4 176.4 192.3 186.4 171.3 Receivable Turnover 142.4 185.3 123.3 85.2 81.8 40.0 40.1 39.5 40.7 40.4 Return on Equity 10.50% 9.31% 6.48% 1.30% 3.90% Return On Assets 7.19% 6.55% - 0.97% 2.98% - 19.41% 6.80% 1.61% 5.11% Payable Turnover Management Effectiveness Return on Invested Capital Dividend Ratios Dividend Per Share 0.0 0.0 0.0 0.0 0.0 Dividend Yield 0.00% 0.00% 0.00% 0.00% 0.00% Dividend Payout Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 13.80% 6.49% (2.54%) (13.26%) (15.44%) Growth Rates Sales EBITDA (50.50%) - - - - Net Income (70.61%) 44.69% 188.70% 104.83% (69.53%) EPS 114.54% (30.01%) (68.40%) (94.90%) (85.67%) Capital Expenditure (Curr Interim vs Prev Interim) - - - - - Research & Development - - - - - Stock Performance Price Close % Change Total Return 307.8 416.1 445.5 377.3 423.5 (26.02%) (6.60%) 18.07% (10.90%) 5.15% (27.3) 3.3 (5.4) (21.4) (41.2) SHAKE SHACK INC. Symbol Currency Scale Source Industry Travel & Leisure Interim Ratios SHAK USD 1,000,000 Worldscope 09/27/2017 USD 06/28/2017 USD 03/29/2017 USD 12/28/2016 USD 09/28/2016 USD 1,196.6 1,308.4 1,223.6 1,340.8 1,282.9 94.6 91.3 76.7 73.3 74.6 Valuation Measures Market Cap Net Sales or Revenues Total Debt - - - 0.0 0.0 277.7 258.2 235.9 225.0 210.3 - - - 1,316.3 1,258.2 EBITDA 16.4 17.2 10.6 10.1 13.0 EBIT 10.8 11.9 5.8 5.9 9.3 - - 13.1 - - 52.8 61.0 61.6 69.4 75.8 Net Assets Enterprise Value Capital Expenditure Valuation Price/Earnings Price/Sales 3.6 4.1 4.2 5.0 5.2 Price/Cash Flow 16.0 18.3 19.3 21.0 20.7 Price/Book Value 6.8 7.7 7.6 8.8 9.0 Price/Tangible BV 6.8 7.7 7.6 8.8 9.0 Enterprise Value/Sales - - - 4.9 5.1 Enterprise Value/EBITDA - - - 30.3 31.6 Enterprise Value /EBIT - - - 45.6 47.2 Enterprise Value /Cash Flow - - - 24.2 24.8 Enterprise Value /Free Cash Flow - - - - 263.3 Total Debt/ Enterprise Value - - - 0.0 0.0 Net Debt/ Enterprise Value - - - - - Total Debt/EBITDA - - - 0.0 0.0 Enterprise Value Credit Statistics Net Debt/EBITDA - - - NEG NEG EBITDA/Interest Expense 34.6 47.0 34.9 94.7 146.5 EBTIDA - Capex / Interest Expense - - - - - 22.8 32.6 19.2 54.7 104.7 Quick Ratio 2.6 2.7 2.7 2.5 3.0 Current Ratio 2.7 2.8 2.9 2.6 3.1 Cash Flow / Current Liabilities 6.5 6.7 7.1 5.9 6.5 Long Term Debt / Common Equity - - - 0.0 0.0 Total Debt / Common Equity - - - 0.0 0.0 Long Term Debt / Total Capital - - - - 0.0 EBIT/ Interest Expense Liquidity Leverage 09/27/2017 USD 06/28/2017 USD 03/29/2017 USD 12/28/2016 USD 09/28/2016 USD Total Debt / Total Capital - - - - 0.0 Working Capital / Total Capital - - - - 0.3 Gross Margin 23.98% 25.62% 21.53% 22.01% 26.36% EBITDA Margin 17.38% 18.83% 13.77% 13.82% 17.49% EBIT Margin 10.26% 10.43% 10.29% 10.75% 10.83% Pre-Tax Margin 10.95% 12.67% 7.19% 7.85% 12.38% 5.28% 5.34% 2.95% 5.35% 5.05% Sales Per Employee 0.1 0.1 0.1 0.1 0.1 Operating Profit Per Employee 0.0 0.0 0.0 0.0 0.0 Net Income Per Employee 0.0 0.0 0.0 0.0 0.0 Assets Per Employee 0.1 0.1 0.1 0.1 0.1 Profitability Ratios Net Margin Efficiency Ratios Total Asset Turnover - - - - - 226.6 237.5 238.8 227.7 230.5 Receivable Turnover 65.8 62.4 52.7 51.2 65.4 Payable Turnover 26.2 29.3 32.4 29.1 30.5 Return on Equity 10.06% 9.97% 9.66% 9.85% 7.14% Return On Assets 6.92% 6.83% 6.54% 6.30% 5.30% - - - 13.39% 5.47% Inventory Turnover Management Effectiveness Return on Invested Capital Dividend Ratios Dividend Per Share 0.0 0.0 0.0 0.0 0.0 Dividend Yield 0.00% 0.00% 0.00% 0.00% 0.00% Dividend Payout Ratio 0.00% 0.00% 0.00% 0.00% 0.00% Sales 36.42% 40.42% 40.64% 40.86% 41.29% EBITDA (4.36%) 62.64% 4.36% (22.32%) 5.50% 2.42% 115.22% (42.17%) 4.09% 14.19% Growth Rates Net Income EPS 32.54% 8.96% 49.48% - - Capital Expenditure (Curr Interim vs Prev Interim) - - - - - Research & Development - - - - - Stock Performance Price Close % Change Total Return 32.6 35.6 33.4 36.8 35.3 (8.59%) 6.64% (9.26%) 4.36% (4.16%) (7.7) (3.2) (6.6) (7.8) (25.5) Homework Week 4 Financial Statement Analysis Executive Summary: Select two competing companies from the same industry (e.g., McDonalds vs. Burger King; Target vs. Walmart; etc.), and calculate the following financial ratios for them based on their 2015 financial statements: 1) Return on Equity 2) Return on Assets 3) Profit Margin Ratio 4) Working Capital 5) Current Ratio 6) Quick (Acid-Test) Ratio 7) Debt-to-Equity Ratio 8) Cash Flow from Operations to Total Liabilities Ratio Discuss from an investor's point-of-view which of the two companies you would rather invest. Please refer to the ratios/measures that you calculated. You may also include information and opinions about other factors (e.g., non-financial factors, market information) that influence your decision. The executive summary should be approximately 1 to 2 pages long, Times New Roman Font size 12, single-spaced. Please print a copy of your summary and bring to class