Chipotle burritos and bowls are delicious meals especially when you are starving for food. What makes the food even better is throwing some of Chipotle’s famous guacamole right on top. Chipotle must purchase expensive equipment like fridges, ovens, and dishwashers in order to provide consumers with food they cherish. In addition, Chipotle may take out bank loans to purchase materials or new buildings that will be used to house Chipotle locations.
The equipment Chipotle purchases are assets and the loans they borrow from banks are liabilities. Any other resources that the company owns outright are equity. The value of assets, liabilities, and equity that Chipotle employs is listed on the company’s balance sheet. This financial document is important for investors and executive management to review so they can analyze the company’s financial health. As long as Chipotle manages its balance sheet by not purchasing faulty assets and borrowing beyond its means, the business will grow even larger.