So far, my blogs have only been about social events (football) and the joy of returning to Columbus. I figured it was time to write about something academic so here’s a little bit about the project I’ve been working on for the past 3 weeks…Chipotle!
The SMF program is broken down into one 3-week, pre-term, “turbo” course and then two 15-week semesters that contain two terms each. In the “turbo” course, we revisit some basic corporate finance fundamentals like time value of money, the capital asset pricing model, weighted average cost of capital and different valuation methods (Discounted Cash Flow and Dividend Discount Model). During the first real term, we take a number of classes including Corporate Finance I which delve deeper into valuation and different capital structures.
The largest grade in Corporate I is an equity research report based on a company of our choosing. My group and I spent a fair amount of time scouring the S&P 500 for a company we liked that wouldn’t be overly challenging and guess what company came up??..Everyone’s favorite fast-casual Mexican restaurant, Chipotle!
The report requires us to dive deep into the company culture, financials, operations, labor force and management to be able to make assumptions about these factors going forward so we can make a forecast of revenues, costs, expenditures and cash flows. More than anything else, the project is supposed to help those of us who want to work as analysts practice our ability to make assumptions and take a view on a company then be able to back up this view with solid projections.
All-in-all, it has been a great experience and I can’t wait to present my report to our class..I wonder if I can get extra credit for having Chipotle cater our lunch…