|Question||What is your appraisal of Chipotle Mexican Grill’s financial performance based on the data contained in case Exhibit 1? How well is the company doing financially? Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Chipotle’s recent financial performance. In addition to the ratios in Table 4.1, there are occasions when you will also need to calculate compound average growth rates (CAGR) for certain financial measures. The formula for calculating CAGR (in percentage terms) is as follows:
CAGR % = [ending value ÷ beginning value]1/n – 1 x 100
(where n = the number of year-to-year or period-to-period changes)
It is beneficial to push class members to be a regular user of the financial ratios in Table 4.1 of Chapter 4 in doing the number-crunching needed to arrive at an analysis-based answer to their assessment of Chipotle’s recent financial performance and to prod them to calculate compound average growth rates.