# Analyze Chipotle Mexican Grill Chipotle Mexican Grill, Inc. (CMG) is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s income statements through operating income for two recent years are as follows (in thousands): a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place. b. Interpret the vertical analysis.

### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Chapter
Section

### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Textbook Problem
121 views

## Analyze Chipotle Mexican GrillChipotle Mexican Grill, Inc. (CMG) is a quick-service restaurant providing a focused menu of burritos, tacos, and salads. Chipotle’s income statements through operating income for two recent years are as follows (in thousands):a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place.b. Interpret the vertical analysis.

a.

To determine

Prepare a vertical analysis of the two income statements.

### Explanation of Solution

Vertical analysis: The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis. This analysis is also known as common size analysis. The vertical analysis percentage is calculated by using the formula:

Vertical analysis=Financial statement itemsBase amount×100

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Prepare a vertical analysis of the two income statements.

 Incorporation CMG Income Statements For the years ended December 31 Particulars Year 2 Year 1 Amount ($) Percent Amount ($) Percent Revenues \$3,904,384 100

b.

To determine

Interpret the vertical analysis.

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started