Initial Public Offering Paper

Chipotle’s operating income increased from $108.2 million in 2007 to $532.7 million in 2013. This produces a CAGR of 30.43%. Rising market prices for natural meats and organically grown ingredients led to Chipotle’s rising costs for food and beverage from 31.9% of revenues in 2007 to 33.4% in 2013 and a CAGR of “only” 30.43%. Besides the operating income, the operating profit margin increased almost every year (10% in 2007, 13.4% in 2009, 15.7% in 2010 and 15.4% in 2011). In 2013 Chipotle had a profit margin of 16.6%, while in 2012 the profit margin was 16.7%. This effect should not be exaggerated, as the total revenue and operating income in 2013 was still higher than the total revenue and operating income in 2012. In addition, the net income almost quintupled from $70.6 million in 2007 to $327.4 million in 2013, generating a CAGR of

Stakeholders invest money with the intent to gain return in the future. It is important for stakeholders to gain access to information and evaluate the firm’s performance before they put money in it. On the other hand, it is the firm’s management team job to make decisions that would maximize the long term value of the firm’s common stock. The intent of this paper is to analyze Costco Wholesale Corporation’s financial performance and to assess how efficient the business has been over a five year period as well as to provide recommendation for financial management strategy.

Address the following questions in a 4-5 page write-up of the Boston Beer Company Case to explore the issue of Initial Public Offerings.

AT&T Wireless is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services and long-distance services. AT&T operates in four segments: Wireless, Wire line, Advertising Solutions and Other. Its Wireless subsidiaries provide both wireless voice and data communications services across the United States, and through roaming agreements, in a substantial number of foreign countries

Costs directly related to an IPO such as underwriting, legal fees, external and financial reporting advisor fees

When a privately held company makes its stock available to the general public for the first time on a securities exchange, this is known as the company’s Initial Public Offering (IPO). The IPO can consist of an initial issue of either debt or equity. The IPO process is also referred to as a private company “going public”. There are numerous benefits associated with going public. IPO benefits include enlarging and diversifying a company’s equity base, allowing cheaper access to capital, improving public image, attracting better management and employees through stock options, enabling transfer of company ownership through mergers/acquisitions, and

CASE QUESTIONS Cash Flows and Value. Cost of Capital Case 1: Hop-In Food Stores, Inc. 1. Determine the correct price for this particular IPO. Use several methods to do this and compare them. 2. What extra information would you try to acquire in a real life situation? Case 2: Chem-Cal Corporation 1. How do you calculate the WACC for this firm? 2. What is the cost of capital of the debt, preferred stock, and common stock (assume the equity beta is 1.22)? 3. Calculate the WACC. How can a WACC be used? 4. Which projects should be selected? (State your assumptions) 5. How should the projects be financed? Analyze all other issues in the case. Case 3: Marriot Corporation 1. What is the Weighted Average Cost of Capital for Marriott Corporation? 2.

Therefore, these concerns can only be handled after the company decides on the offering structure, which defines investor’s demographic and a precise stock exchange to list on. Afterward, the company and its underwriters must begin to prepare the required documentation for both potential investors and regulators. The main documents are registration statements and a prospectus which contains all the financial and non-financial information that potential investors require in order to make the investment decision. In most countries, the contents of the prospectus must be approved by the local securities regulators before it can be distributed to potential buyers. (Bodie et al. 2005,

It is always a challenge to evaluate IPO and find the appropriate offer price. At this case too, many measures and methods play a vital role. Usually IPO

During the IPO road show, the IPO underwriters introduce the company and its executives, describe the company’s history and growth potential and business outlook, possible opening stock price, earnings figures, and specific life cycle followed by a Q&A session with analysts and investors. The underwriters take senior management on a tour to introduce the senior management of the company to key prospective investors. They also answer questions from skeptics. Investment bankers consult professional presentation training specialists to prepare CEOs and CFOs for the rigors of IPO road shows. Furthermore, the company executives are prepared to discuss infrastructure, talent, board of directors, partners, customers, as well as risk management practices. The presentation team rehearse and practice several times before the first day.

The objective of this thesis is to value Chipotle Mexican Grill, Inc., a U.S.-based fast-casual restaurant company that had recently gone through a foodborne illness outbreak, as December of 2016. To value Chipotle, the author has analyzed the strategic outlook and the financial performance of the company, as well as conducted both the discounted cash flow analysis and the comparable company analysis.

It is true that IPO raises huge capital for the issuing company. But in order to launch an Initial Public Offering (IPO), it is also necessary to make certain investments. Setting up an IPO does not always lead to an improvement in the economic performance of the company. A continuing expenditure has to be incurred after the setting up of an IPO by the parent company. A lot of expenses have to be incurred in the form of legal fees, printing costs and accounting fees, which are connected to the registering of an IPO. Such expenses might cost hundreds of US dollars. Apart from such enormous costs, there are other factors as well that should be taken into consideration by the company while introducing an IPO.

It is also recommended to continue diversifying, and growing the ShopHouse Southeast Asian Kitchen, and Pizzeria Locale. As released in Chipotle’s 2014 Annual Report, two-thirds of business is take-out, so it is recommended to increase marketing for catering services and online ordering. Also, a high fixed asset ratio indicates a need to increase plant, property, and equipment to support the increase in sales. It is also recommended that Chipotle continue reinvesting shareholder’s equity to maintain financial position while growing the

Chipotle Mexican Food Restaurant is considering a new product launch. One of Chipotle’s areas of weakness is their limited menu offerings. Currently the limited amount of menu items is hurting Chipotle’s sales. The new products that Chipotle will be offering will be Red and Green Chile. This new product will boost Chipotle’s sales. These are items that

Chipotle also has a very stable financial situation. Currently, their balance sheet contains $301 million in cash and just $3.81 million in debt exhibiting a high coverage ratio. They also operate at margins much higher than most of the restaurant industry with a profit margin of 9.43%. Average restaurant sales have stayed somewhat consistent over the past three years with a very slight increase to about $1.8 million, but restaurant and company level margins have been increasing consistently since 2005 with restaurants now operating at a 26.4% margin. All this has lead Chipotle to believe that they will open about 140 new restaurants in 2010 which is a significant jump from the 67 openings in the year ending September 30, 2010.