Chipotle Mexican Grill began with a single location in 1993 and now operates mor

Question

Chipotle Mexican Grill began with a single location in 1993 and now operates more than 1,700 restaurants. Adapted versions of the company’s income statements (in $000s) are as follows:

Prepare a common-size income statement for each year. (Round answers to 1 decimal place, e.g. 50.1%.)

2015 2014 Revenue $4,501,223 $4,108,269 Restaurant operating costs   Food, beverage, and packaging 1,503,835 1,420,994   Labor 1,045,726 904,407   Occupancy 262,412 230,868   Other operating costs 514,963 434,244   General and administrative expenses 250,214 273,897   Depreciation and amortization 130,368 110,474   Pre-opening costs 16,922 15,609   Loss on disposal of assets 13,194 6,976     Total operating expenses 3,737,634 3,397,469   Income from operations 763,589 710,800   Interest and other income (expense), net 6,278 3,503   Income before income taxes 769,867 714,303   Provision for income taxes 294,265 268,929     Net income $475,602 $445,374

Explanation / Answer

Common-size income statement Income Statement 2014 % 2015 % Revenue from operations $4,108,269 100.0% $4,501,223 100.0% Interest and other income $3,503 0.1% $6,278 0.1% Total revenue(A) $4,111,772 100.1% $4,507,501 100.1% Expenses: Food, beverage, and packaging $1,420,994 34.6% $1,503,835 33.4% Labor $904,407 22.0% $1,045,726 23.2% Occupancy $230,868 5.6% $262,412 5.8% Other operating costs $434,244 10.6% $514,963 11.4% General and administrative expenses $273,897 6.7% $250,214 5.6% Depreciation and amortization $110,474 2.7% $130,368 2.9% Pre-opening costs $15,609 0.4% $16,922 0.4%   Loss on disposal of assets $6,976 0.2% $13,194 0.3% Total expenses(B) $3,397,469 82.7% $3,737,634 83.0% Income before Income tax (A -B) $714,303 17.4% $769,867 17.1% Provision for income tax $268,929 6.5% $294,265 6.5% Net income $445,374 10.8% $475,602 10.6%

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