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John rotanti kicks off a two part series on the basic of financial statements, including what goes into a balance sheet. How the sale of a brido at chapotle becomes shareholder n equity and how financial statements work together. John: If you can increase the price of something to offset input cost inflation without decreasing demand for the product, that's pricing power. And one of the main places we see that and capture that in the numbers is from the gross profit margetimcris hill, and that was motley.

Motley Fool Senior Analyst John Rotonti walks you through the most important financial statements through the sale of a burrito. (Yes, really.)

In part one of this two part series on financial statements, Rotonti discusses:

- How to understand balance sheets and income statements.

- A key metric that can tell you about a company’s pricing power.

- What you’re actually purchasing when you buy a stock.

Bonus Resources!

Chipotle’s valuation metrics - https://www.fool.com/premium/company/nyse/cmg/

Reconciling Net Income to Free Cash Flow - https://www.fool.com/investing/general/2014/09/24/reconciling-net-income-to-free-cash-flow.aspx

Stock discussed: CMG

Host: John Rotonti

Producer: Ricky Mulvey

Engineers: Rick Engdahl, Tim Sparks