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Chipotle Mexican Grill Financial Analysis

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Chipotle Mexican Grill is an American restaurants chain that offers a focused menu of burritos and tacos. The company was founded by Steve Ells in 1993 with a vision of “food with entirety”. The company started its operations in the state of Colorado when it launched its first Chipotle in the city of Denver. Over the course of next five years, the company expanded its operations and successfully launched its Chipotle restaurants at several locations across the state of Colorado. Impressed with the proof of Chipotle’s concept, McDonald's jumped on the wagon in 1998 by acquiring small stake in the company which was later converted into the controlling stake in 2000. Over the course of next several years, Chipotle expanded its operations rapidly …show more content…

Chipotle continued its rapid expansion and transformed itself as a multinational fast casual chain with over 1,400 locations. The company’s impressive expansion is indicated by its financial performance over the las five years. The company’s financial analysis indicates that the company is in sound financial position as evident by the company’s profitability ratios, all of which are showing positive trend over the review period. The company’s current ratio indicates that the company has enough resources to meet its current obligations while the company’s leverage ratios indicates that the company is able to maintain perfect balance between debt and equity which is also evident by the company impressive return on equity ratio. (see financial ratios, Attachment A). Chipotle is continuing with its growth strategy and continuously working to diversifying its principal business. Recently, the company started testing its ShopHouse initiative with an aim to further diversify its business and expand its customer base by attracting new demographics. (see Opportunities, Attachment …show more content…

Supply chain is very important for Chipotle’s operations because of the fact that the company is dealing with small number of suppliers when it comes to key ingredients. The supply chain is becoming inefficient due to the company’s large footprints. The company’s supply chain is also subject to shortages and price fluctuations which is great threat to smooth functioning of the company’s operations. (see Supplier’s Power, Attachment B). The company’s main challenge is to fight its current and future competition, in doing so, Chipotle has alternative choices. To deter competition, the company needs to find a ways to attract new customers and the best ways is to make Chipotle stand out among competition. In doing so, the company need to focus on new innovations and continuously work on developing new menu items. (see Threats, Attachment C). Alternatively, the company needs to further diversify its business and expand its line of Asian fast casual restaurants. (see Opportunities, Attachment

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