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Instructions

Discussion: 10-K Chipotle Case Study (Optional, Ungraded)No unread replies.No replies. Engage This activity aims to help you with the discussion activity that follows.In late 2015 and 2016, Chipotle Mexican Grill (Links to an external site.) a popular restaurant experienced a dramatic change in fortunes seen in its 2019 Statement of Income (Chipotle, Item 6, Selected Financial Data (Links to an external site.), p. 28). As an optional exercise in thought and exploration that you are not responsible for reporting on in this discussion, see if you can identify this change and the likely reason for it by consulting the Statement of Income and materials found in its 2016 10-K.(2019). 10-K Chipotle - Item#8 (Links to an external site.). Chipotle Corporation.(2016). 10-K Chipotle - Item#7 (Links to an external site.). Chipotle Corporation.Examining the Table of Contents, you may notice phrases such as risk, and financial condition and results of operations offering insight into a firms financial condition or results. What do you think may have happened that affected this firm so dramatically? How is this depicted in the firms financial statements? Does this illustrate a longer term risk or characteristic associated with this firm? These questions are for you to think about, and you do not have to supply formal answers.Chipotle is a listed firm, and thus you will find its financial information published electronically either on the firmssite lINKS FOR THIS ASSIGNMENT:https://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231x10k.htm#Item_7https://www.sec.gov/Archives/edgar/data/1058090/000105809019000007/cmg-20181231x10k.htm#Item_8https://www.sec.gov/Archives/edgar/data/1058090/000105809017000009/cmg-20161231x10k.htm#Item_6https://www.chipotle.com/

Answer

What do you think may have happened that affected this firm so dramatically? An increase in expenses is the cause of these changes. Labor costs may have increased due to workers demanding higher pay and increased benefits. Occupancy costs may have increased due to higher rent/lease charges, land and other assets depreciated, thus reducing their value. The loss on disposal of assets also increased because assets were being disposed at a much lower price than what they are worth. All these increases in expenses, depreciation and loss on asset disposal negatively impacted the revenue, thus making it reduce. How is this depicted in the firms financial statements? The total revenue in 2015 was $4,501,223 which reduced to $3,904,384 in 2016, in 2015,labour costs were $1,045,726 which increased t...
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