I chose Chipotle as my company and Qdoba as competitor - this week we have to do pro form financial statements. This is due tomorrow.

1. Pro-forma financial statements require us to make conservative assumptions about future growth; as such, your discussion must justify and support any assumptions you have made in developing the pro-formas.
2. Discuss current strategy (ies) used by the company/competitor and any relevant future investments required to support the business unit (s) strategy(ies) to achieve higher ROI and market position.
3. Perform a ratio analysis on the two pro-forma financial statements you?ve developed (company and competitor), and provide a discussion regarding future profitability and competitive performance as well as any significant changes you observe. To successfully complete this assignment, please show all ratio analysis calculations.
4. Pro-forma financial statements require us to make conservative assumptions about future growth; as such, your discussion must justify and support any assumptions you have made in developing the pro-formas.
5. Discuss current strategy (ies) used by the company/competitor and any relevant future investments required to support the business unit (s) strategy(ies) to achieve higher ROI and market position.
6. Performaratioanalysisonthetwopro-formafinancialstatementsyou??vedeveloped(companyandcompetitor),andprovideadiscussionregardingfutureprofitabilityandcompetitiveperformanceaswellasanysignificantchangesyouobserve.Tosuccessfullycompletethisassignment,pleaseshowallratioanalysiscalculations.

Please provide Reference Page as well....

1. Review the Management's Discussion and Review (MDR), aka the Management's Discussion and Analysis (MDA) section, which can be obtained from the SEC 10-K reports. Develop pro-forma financial statements for your company/competitor for the next 5 years. Pro-forma financial statements require us to make conservative assumptions about future growth; as such, your discussion must justify and support any assumptions you have made in developing the pro-formas. 2. Discuss current strategy (ies) used by the company/competitor and any relevant future investments required to support the business unit (s) strategy(ies) to achieve higher ROI and market position. 3. Perform a ratio analysis on the two pro-forma financial statements you've developed (company and competitor), and provide a discussion regarding future profitability and competitive performance as well as any significant changes you observe. To successfully complete this assignment, please show all ratio analysis calculations I have chose Chipotle and competitor of Qdoba - Financial Analysis and Proposal Component 1 Amy A Jarosz Grand Canyon University Chipotle Restaurant vs Qdoba Mexican Grill Chipotle Mexican Grill Inc. and Qdoba Mexican Grill Inc. have similarities. However, in the business realm, there are differences that impact each regarding finances and successfulness. Following is an analysis of each company providing insight and risks that are factored in for hopes of success. Chipotle Mexican Grill Inc. Business Overall: Chipotle Mexican Grill, Inc. serves a menu focused on burritos, tacos, burrito bowls and salad. However, high quality ingredients and the team concept of running a business has made Chipotle successful even with drawbacks over the years. As of 2014, Chipotle operated in the United States with 1,755 restaurants as well as seven in Canada, six in England, three in France and one in Germany. Also, restaurants include nine Shophouse Southeast Asian Kitchen restaurants and two Pizzeria Locale establishments. All Chipotle's restaurants are companyowned rather than franchised. Products and Services: Products used by Chipotle are purchased fresh and prepared by hand. However, to take this a step farther, Chipotle is involved on the farms and in the field where the food comes from. All meat is raised without the use of antibiotics or added hormones. Produce is also grown within 350 miles of the restaurant where it is served. Dairy products come from cows that are not given the growth hormone and dairies are to provide a standard of animal welfare. Chipotle restaurants only serve burritos, burrito bowls, tacos and salads. However, customers can customize orders to many choices of ingredients. 2 Chipotle Restaurant vs Qdoba Mexican Grill 3 Customers: Customers include individuals who want food served fast without the typical experience. Restaurants accept orders by fax, online and through IPhone or Android order applications. Also, customers can come in and order or drive thru option. Goals: The goal is to open more restaurants yearly. While ShopHouse and investment in Pizzeria Locale have been added, the immediate focus is to continue growing the Chiptole brand. Strategies: The strategic plan focuses on changing the way people think and eat fast food. The goal for Chipotle is to open between 190 and 205 additional resturants. By using high quality raw ingredients, cooking methods, friendly employees as well as the way that the restaurants appeal to the customers' eye Chipotle looks to continue increasing business growth. Market Position: Chipotle is well positioned to continue to grown in existing and new markets. Chipotle increases customer awareness about what they eat and how it is prepared. Chipotle is one of the most recognized restaurants in the United States. Whole ingredients as well as cooking in an open restaurant kitchen has helped to create the competitive position Chipotle is in at this time. General Risk Factors: General risk factors for the restaurant industry include seasonal sales and weather conditions or natural disasters that may impact profit. Changes in consumer preferences and also consumer spending are risk factors. Competitors also cause an impact due to any specials, coupons or other initiatives that may arise. Fax or online issues that may effect ordering are risk Chipotle Restaurant vs Qdoba Mexican Grill 4 factors due to possibility of not being able to accomplish order. If customers do not like new menu items or if competition offers a lower cost would both be a risk to the restaurant. Collection and maintaining personal records of employees as well as use of debit/credit cards are factors that are a risk for Chipotle. Keeping all the this information confidential is important to the reputation of the business. Any security breaches or violations could cause a decrease in sales as well as the ability to attract and keep employees. Finally, changes in government regulations may cause Chipotle to achieve targeted goals. Quantitative and Qualitative Market Risk Factors: Chipotle is exposed to commodity price risks, changing interest rates and foreign currency exchange risk. While Chipotle have tried to increase the number of suppliers instead of raising prices when applicable. If menu prices are increased, customers may not return or even try the restuarant. Changes in interest rates and foreign currency exchange both are risks for the company that there is no control over. Again, Chipotle looks at ways to decrease costs without damaging the product or increasing the purchase price for customers. Competitors: Competitors include other restuarants that offer different food products. Price, quality of food and service speed are also factors that competitive restuarants may look at to sway customers to come to their restuarant. Competition includes locally owed restuarants and national or regional chains. Chipotle does not franchise so many competitors are those resturants that do offer franchising. Many competitors offer dine-in, carry out and delivery services. Also, competitors offer specific nutritional needs such as low fat, lower in carbohydrates or calories. Other competition is in-store cafes at grocery stores or delis. Chipotle Restaurant vs Qdoba Mexican Grill Competitive Technology: Chipotle has a point-of-sales system that operated locally to record sales transactions, received out of store orders, authorizes, batches and transmits credit card transactions. Also, the system allows employees to enter time close infomration and product management reports. For some marketing programs, information about customers are also gathered and stored. This information is regulated for security reasons. Regulatory Considerations: Each restaurant must consider regulations set by federal and state government. Regulations regarding health, sanitation, fire, safety, zoning, building and other departments must all be taken into consideration. Permits, licensing and approval are detrimental in establishing as well as maintaining restuarants. Chipotle has many environmental regulations that they have to consider due to the fields and farms used to obtain food for the restaurant. If these regulations are not followed operations of the store could be impacted greatly. Operating Characteristics: Chipotle has several operating activities that increased operating costs in 2015. These changes were due to the business growing. As the business grows, new restuarants are opened and more employees are hired. Food, beverage and packing costs also increased. This was due to the inflation on many food items. Other operating costs that increased were marketing / promotional costs, bank and credit card fees. Utilities and maintenance costs also increased. Due to being owned and not franchised, corporate office finds and fund new locations this has also increased with business growth (Hitt, 2012) 5 Chipotle Restaurant vs Qdoba Mexican Grill 6 Qdoba Mexican Grill Business Overall: Qdoba Mexican Grill is a subsidiary of Jack in the Box Inc. Jack in the Box opened in 1951. Currently, it is one of the nation's largest hamburger chains. In 2003, Qdoba Restaurant Corporation was acquired by Jack in the Box. The reasoning was due to the competition in the hamburger industry. By acquiring Qdoba, this opened a new market to grow in as well as balance risk factors. As of 2015, Qdoba operated in 47 states with 661 restaurants. There were 322 company-operated and 339 franchise operated establishments. Qdoba, as of 2015, was the second largest fast Mexican brand in the United States. Also, the largest franchise in the segment of industry. Products and Services: Customers are offered sit down, drive thru and even catering options. Catering options can be feed groups between five and hundreds. Qdoba restaurant is open from 10:30 am to 10:00 pm and have a seating capacity of 60 to 80 people. Some restaurants also offer patio seating outdoors. The menu is in the customer's control. Each order can be specifically built to an individual's taste preference and any nutritional option he or she needs. Ingredients are fresh. Guacamole is prepared on site throughout the day, beans are simmered, shredded beef and port are slow roasted as well as chicken and steak being flame grilled. All of these characteristics give Qdoba customers the opportunity to have food made fresh but to an individual liking. Qdoba serves breakfast and some locations are open 24 hours on weekends (Yagalla, 2013). Also, Qdoba has opened on college campuses and may offer college meal plans (Ferraresi, 2014). Chipotle Restaurant vs Qdoba Mexican Grill 7 Customers: Customers include college students on campus where Qdoba have opened (Bass, 2013). Kids menu has also been added as well as breakfast to market the family and those who eat breakfast. Qdoba is a family fast food restaurant that offers the option of an individual specific order. Free Wi-Fi is also available which attracts white color workers as well as those individuals who just want to use this option. Goals: The goal is to have 1800 to 2000 restaurant units across the US. Heavily populated areas have company owned restuarants. The populated areas will have franchises in place. Both will provide growth and profit for the company. Strategies: The strategic plan focused on Qdoba and Jack in the Box continuing to grow, average unit volume to increase, profitability improve and returns on invested capital. Qdoba has become a prominent entity of the resturant operations. Strategy includes building more Qdoba company locations and provide more opportunities for franchise locations. Also, Qdoba is changing name in 2016 from Qdoba Mexican Grill to Qdoba Mexican Eats to reflect the variety of offers in the menu. Market Position: Qdoba restaurants growth is going into markets where there are no exsisting locations. At the end of 2015, Qdoba held approximately 44% of total company-operated units versus 16% in 2010, as an subsidiary of Jack in the Box. As of 2015, Qdoba operated in 47 states with 661 restaurants. There were 322 company-operated and 339 franchise operated establishments. Chipotle Restaurant vs Qdoba Mexican Grill 8 Qdoba, as of 2011, was the second largest fast Mexican brand in the United States. Also, the largest franchise in the segment of industry. General Risk Factors: General risk factors for the restaurant industry include seasonal sales and weather conditions or natural disasters that may impact profit. Inflation, increased cost of food, labor, fuel, utilities cost, insurance, increase in employees benefits such as wages or insurance cost and premiums also are risk factors. Competitors also cause an impact due to any specials, coupons or other initiatives that may arise. Increased competition is a risk in itself. If customers do not like new menu items or if competition offers a lower cost would both be a risk to the restaurant. Finally, the employees being qualified and experienced. This includes both hourly employees as well as managers. Quantitative and Qualitative Market Risk Factors: Qdoba Mexican Grill primary exposure is change of interest rates. They are also exposed to utility price flucuations due to factors such as weather and other uncontrollable factors. The ability to recover from increased costs through raising prices is limited due to competitive environments. Competitors: Competitors include other restuarants that offer different food products. Price, quality of food and service speed are also factors that competitive restuarants may look at to sway customers to come to their restaurant versus Qdoba. Advertising, name identification, location and attractivness of the restaurant are also factors. Finally, consumers dining habits and Chipotle Restaurant vs Qdoba Mexican Grill 9 preferences impact Qdoba's business. If a customer is being conciencious about diet and nutrition, he or she may eat at home instead of a restaurant. Competitive Technology: Qdoba restaurants have point-of-sale software with touch screens. This software also allows acceptance of debit and credit card at all locations. Finally, back-of-the-restaurant software allows control of purchasing, inventory and food and labor costs without personal count. All of this software has been customized for Qdoba's standards. Regulatory Considerations: Each restaurant must consider regulations set by federal and state government. Regulations regarding health, sanitation, fire, safety, zoning, building and other departments must all be taken into consideration. Permits, licensing and approval are detrimental in establishing as well as maintaining restuarants. Qdoba sales alcholic beverages. This also requires licensing. Failure to obtain license may result in issues regarding operations. Operating Characteristics: Qdoba has several operating activities that increased cash flow in 2011. These includes advertising due to decrease in company operated restaurants, income tax, property rent, pension contribution and bonuses. The franchise program offers an agreement that for an initial franchise fee of $30,000 per restaurant for a 10 year term and marketing fees at 2% gross of sales. Developers are required to pay a fee also. However, this fee can be credited against the franchise fee. Chipotle Restaurant vs Qdoba Mexican Grill 10 Analysis of the Fundamentals Instructions: 1. Using the most recent U.S. Securities and Exchange Commission (SEC) 10-K reports for your company and chosen competitor, provide a brief yet succinct comparative analysis as below: Criterion Selected Company - Chipotle Chosen Competitor Company Qdoba Business overall All company owned - US, Canada other countries Company owned and franchised Products & services Burritos, burrito bowls, tacos and salads. Ingredients are farm raised/ organic - Chipotle assists in raising Wide variety - breakfast menu. Ingredients are fresh Customers Can order by fax, online or on phone with application White color workers, free Wi-Fi available, college students - restaurant has been placed on campuses Goals Increase yearly Increase growth; increase franchises Strategies Base strategy on ingredients and attracting customers with that basis continuing to grow, average uni volume to increase, profitability improves and returns on investe capital Market Positions Well positioned for continued growth 2nd largest Mexican fast food chain in the industry General risk factors Weather, inflation, government regulation, competition Weather, inflation, competition Quantitative and qualitative mark risk factors commodity price risks, changing interest rates and foreign currency exchange risk Change in interest rates Competitors Other restaurants, delis, home cooking Other restaurants, home cooking Competitive technology Point of sale software, customer information is gathered for marketing Touch screens, accept debit and credit cards and use back of restaurant software to control purchasing, inventory and food and labor costs Regulations regarding health, sanitation, fire, safety, zoning, building and other departments Regulations regarding health, sanitation, fire, safety, zoning, building and other departments Regulatory considerations Chipotle Restaurant vs Qdoba Mexican Grill 11 must all be taken into consideration. Permits, licensing and approval, environmental regulations Operating characteristics must all be taken into consideration. Permits, licensin and approval. Alcohol licensing advertising due to decrease in company operated restaurants, income tax, property rent, pension contribution and bonus The franchise program offers an agreement that for an initial franchise fee of $30,000 per restaurant for a 10-year term an marketing fees at 2% gross of sales. Developers are required t pay a fee also. more employees are hired, Food, beverage and packing costs also increased. This was due to the inflation on many food items. Other operating costs that increased were marketing / promotional costs, bank and credit card fees. Utilities and maintenance costs also increased 2. Provide your rationale for your choice of equity valuation model: Comparable model is used when tow equities are in a similar class. Chipotle and Qdoba are very similar. However, they have differences that if looked at in depth could provide opportunity for one or both companies. Both are successful businesses, however Chipotle is more widespread and not just nationwide. Chipotle - as of 12/31/15 - positive earnings growth - has the ability to cover short term cash needs Current Ratio - 291% Gross Profit Margin - 26% Pre Tax - ROE - 36% Quick Ratio - 286% Operating Margin - 17% After Tax - ROE - 22% Cash Ratio - 237% Profit Margin - 11% Qdoba - as of 12/31/15 - Profit is raising and operating profit and margin increased from past years Current Ratio - 0.65 Pre Tax - ROE - 0.8 Operating Margin -18% Gross Profit Margin - 27.45% Quick Ratio - 0.61 After Tax - ROE - 121.5 Cash Ratio - 0.59 Profit Margin - 0.1 Chipotle Restaurant vs Qdoba Mexican Grill 12 REFERENCES \"2015 Form 10-K, Chipotle Mexican Grill, Inc.\" United States Securities and Exchange Commission. February 4, 2015 Retrieved 2016-08-17 \"2015 Form 10, K, Qdoba Mexican Grill, Inc.\" United State Securities and Exchange Commission. September 27, 2015. Retrieved 2016-08-17 Bass, Rachel (November 5, 2014). Qdoba caters to campus' Mexican crave\". Daily Illini Ferraresi, Michael (May 6, 2014). \"New eateries coming to Student Union\". GCU Today. Grand Canyon University News Bureau Hitt, Michael A. (2012). Strategic Management Cases: Competitiveness and Globalization (tenth ed.) Cengage Learning. ISBN 973-1-122-49524-6 Yagalla, Mark (December 1, 2013). \"Jack in the Box and Qdoba Look Set to Take Down Chipotle\". The Motley Fool. Due Date: Aug 31, 2016 23:59:59 Max Points: 75 Details: Throughout this course you will prepare a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) that will demonstrate your understanding of key financial concepts, strategies and practices. After selecting a company to profile, you will construct a comparative financial analysis of your selected company's financial position with that of a prime competitor, for example, Amazon and Netflix, Microsoft and Oracle, or Bank of America and JPMorgan Chase & Co. Following the nine-step assessment process detailed in Assessing a Company's Future Financial Health, your financial analysis and proposal will be composed of four separate component assignments in topics 2, 4, 6, and 8. For this assignment, apply the following two steps of the nine-step assessment process detailed in Assessing a Company's Future Financial Health (i.e., Step 3: Investments in Assets and Step 4: Economic Performance)to compose further assessment of the company/competitor pairing analysis as below: 1. Review the Management's Discussion and Review (MDR), aka the Management's Discussion and Analysis (MDA) section, which can be obtained from the SEC 10-K reports. Develop pro-forma financial statements for your company/competitor for the next 5 years. Pro-forma financial statements require us to make conservative assumptions about future growth; as such, your discussion must justify and support any assumptions you have made in developing the pro-formas. 2. Discuss current strategy (ies) used by the company/competitor and any relevant future investments required to support the business unit (s) strategy(ies) to achieve higher ROI and market position. 3. Perform a ratio analysis on the two pro-forma financial statements you've developed (company and competitor), and provide a discussion regarding future profitability and competitive performance as well as any significant changes you observe. To successfully complete this assignment, please show all ratio analysis calculations. Note: You will be required to re-submit this assignment, revised to incorporate all instructor feedback, along with the other three component assignments as one comprehensive submission in Topic 8. To save time later in the course, consider addressing any feedback soon after this assignment has been graded and returned to you. Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required. This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion. You are required to submit this assignment to Turnitin. Please refer to the directions in the Student Success Center Financial Analysis and Proposal Component 2 2 1 Less than Unsatisfactory Satisfactory 0.00% 74.00% 3 Satisfactory 79.00% 4 Good 87.00% 5 Excellent 100.00% 70.0 %Content The required 70.0 % Incorporation set of assessment of the Required Set elements and of Assessment subsection data Elements and is not present. Subsection Data 20.0 %Organization & Effectiveness 7.0 % Thesis Paper lacks any Development discernible and Purpose overall purpose or organizing claim. The required setThe required set The required The required set of assessment of assessment set of of assessment elements and elements and assessment elements and subsection data subsection data is elements and subsection data is is incorporated, incorporated, but subsection data present and but the minimal detail or is present, and comprehensive. information support is is incorporated The submission provided is provided for one in full. The further incomplete, or more submission incorporates inaccurate, or components. encompasses analysis of otherwise essential details supporting deficient. and provides evidence appropriate insightfully and support. provides specific examples with relevance. Level of detail is appropriate. Thesis is Thesis is apparent Thesis is clear Thesis is insufficiently and appropriate and forecasts comprehensive developed or to purpose. the and contains the vague. Purpose development of essence of the is not clear. the paper. paper. Thesis Thesis is statement makes descriptive and the purpose of the reflective of the paper clear. arguments and appropriate to the purpose. Statement of Sufficient Argument is Argument Clear and 8.0 % purpose is not justification of orderly, but may shows logical convincing Argument justified by the claims is have a few progressions. argument that Logic and inconsistencies. Techniques of presents a Construction conclusion. The lacking. conclusion does Argument lacks The argument argumentation persuasive claim not support the consistent unity. presents minimal are evident. in a distinctive claim made. There are justification of There is a and compelling Argument is obvious flaws in claims. Argument smooth manner. All incoherent and the logic. Some logically, but not progression of sources are uses sources have thoroughly, claims from authoritative. noncredible questionable supports the introduction to sources. credibility. purpose. Sources conclusion. used are credible. Most sources Introduction and are conclusion authoritative. bracket the thesis. Surface errors Frequent and Some mechanical Prose is largely Writer is clearly 5.0 % errors or typos free of in command of Mechanics of are pervasive repetitive enough that mechanical are present, but mechanical standard, written, Writing they impede errors distract they are not errors, academic English. (includes communication the reader. overly distracting although a few spelling, Inconsistencies to the reader. may be present. punctuation, of meaning. Inappropriate in language Correct and The writer uses grammar, language use) word choice or choice (register) varied sentence a variety of sentence or word choice structure and effective construction is are present. audiencesentence used. Sentence appropriate structure is language are correct but not employed. varied. 10.0 %Format Template is not Appropriate Appropriate 5.0 % Paper template is template is used. Format (use of used appropriately orused, but some Formatting is appropriate documentation elements are correct, although style for the format is rarely missing or some minor major and mistaken. A lack errors may be assignment) followed correctly. of control with present. formatting is apparent. Sources are not Documentation Sources are 5.0 % of sources is documented, as Documentatio documented. inconsistent or appropriate to n of Sources incorrect, as assignment and (citations, appropriate to style, although footnotes, assignment and some formatting references, style, with errors may be bibliography, numerous present. etc., as formatting appropriate to errors. assignment and style) 100 % structures and figures of speech. Appropriate All format template is fully elements are used. There are correct. virtually no errors in formatting style. Sources are Sources are documented, as completely and appropriate to correctly assignment and documented, as style, and appropriate to format is mostly assignment and correct. style, and format is free of error