Financial statement analysis and common stock valuation

Martin P. Dybek. Stock Analysis on Net — Martin P. Dybek
Financial Analyst
Stock Analysis on Net

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Chipotle Mexican Grill Inc. (NYSE:CMG)

Analysis of Long-term (Investment) Activity Ratios
Quarterly Data

Measures how efficiently Chipotle Mexican Grill Inc. generates revenues from its investments in fixed or total assets.

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

An approach to decomposing Chipotle Mexican Grill Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

Enterprise Value (EV)

Enterprise value is total company value (the market value of common equity, debt, and preferred equity) minus the value of cash and short-term investments.

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based on the assets’ systematic risk levels. Systematic risk is the variability of returns that is due to macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

Long-term Trends

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

An approach to decomposing Chipotle Mexican Grill Inc. return on equity, return on assets, and net profit margin ratio as the product of other financial ratios.

Price to FCFE (P/FCFE)

Free cash flow to equity is the cash flow available to Chipotle Mexican Grill Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.

Enterprise Value to FCFF (EV/FCFF)

Free cash flow to the firm is the cash flow available to the Chipotle Mexican Grill Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.

Dividend Discount Model (DDM)

The dividend discount model (DDM) is a technique for estimating the value of a share of Chipotle Mexican Grill Inc. common stock issue as the present value of all future dividends.

Analysis of Profitability Ratios
Quarterly Data

Measures the income of Chipotle Mexican Grill Inc. relative to its revenues and invested capital.

Enterprise Value to EBITDA (EV/EBITDA)

To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE discounted at the required rate of return on equity.

Aggregate Accruals

Financial reporting quality relates to the accuracy with which Chipotle Mexican Grill Inc. reported financial statements reflect its operating performance and to their usefulness for forecasting future cash flows.
Aggregate accruals deriving measures of the accrual component of Chipotle Mexican Grill Inc. earnings.