Investment Prospectus for Chihuahua, Inc.

A Comparative Financial Analysis of Whole Foods Market, Inc. vs Safeway Inc.and Investment Recommendation

March 20, 2009

Prepared by:Francis Tao, Leah Lundy and Qian Ye

Table of Contents

Table of Contents---------------------------------------------------------------------------------------------1 i1.0 Executive Summary ------------------------------------------------------------------------------------ 12.0 General Information ------------------------------------------------------------------------------------

2.1 Whole Foods Market, Inc. ------------------------------------------------------------------------2.2 Safeway Inc. ----------------------------------------------------------------------------------------

3.0 Industry Information ------------------------------------------------------------------------------------4.0 Company Information and Financial Highlights ----------------------------------------------------5.0 Comparative Financial Statement Analysis ----------------------------------------------------------

5.1 Trend Analysis (Horizontal Analysis) ----------------------------------------------------------- 5.1.1 Whole Foods Market, Inc. ----------------------------------------------------------------- 5.1.2 Safeway Inc. --------------------------------------------------------------------------------- 5.1.3 Conclusion from Trend Analysis (Horizontal Analysis) -------------------------------5.2 Common-Sized Analysis (Vertical Analysis) -------------------------------------------------- 5.2.1 Whole Foods Market, Inc. ----------------------------------------------------------------- 5.2.2 Safeway Inc. --------------------------------------------------------------------------------- 5.2.3Conclusion from Common-Sized Analysis (Vertical Analysis)------------------------

6.0 Analytical Measures – Solvency and Profitability Analysis --------------------------------------6.1 Solvency Measures -------------------------------------------------------------------------------

6.1.1 Working Capital -------------------------------------------------------------------------6.1.2 Current Ratio -----------------------------------------------------------------------------6.1.3 Quick Ratio -------------------------------------------------------------------------------6.1.4 Accounts Receivable Turnover --------------------------------------------------------6.1.5 Number of Days’ in Receivables ------------------------------------------------------6.1.6 Inventory Turnover ----------------------------------------------------------------------6.1.7 Number of Days Sales in Inventory ---------------------------------------------------6.1.8 Ratio of Fixed Assets to Long-term Liabilities ---------------------------------------6.1.9 Ration of Liabilities to Stockholders’ Equity -----------------------------------------6.1.10 Number of Times Interest Charges Earned -------------------------------------------

6.2 Profitability Measures -----------------------------------------------------------------------------6.2.1 Ratio of Net Sales to Assets -------------------------------------------------------------6.2.2 Rate Earned on Total Assets ------------------------------------------------------------6.2.3 Rate Earned on Stockholders’ Equity --------------------------------------------------6.2.4 Rate earned on Common Stockholders’ Equity --------------------------------------6.2.5 Earnings per Share on Common Stock ------------------------------------------------6.2.6 Price-Earnings Ratio ---------------------------------------------------------------------6.2.7 Dividend Yield ----------------------------------------------------------------------------6.2.8 Dividend Yield ----------------------------------------------------------------------------

7.0 Conclusion and Recommendation ---------------------------------------------------------------------Appnedix A – Description of Analytical Measures Used -----------------------------------------------Appendix B – Whole Foods Market, Inc., Comparative Balance Sheet, Horizontal Analysis -----Appendix C – Whole Foods Market, Inc., Comparative Balance Sheet, Vertical Analysis ---------Appendix D – Whole Foods Market, Inc., Comparative Income Statement, Horizontal Analysis –Appendix E – Whole Foods Market, Inc., Comparative Income Statement, Vertical Analysis -----Appendix F – Safeway, Inc., Comparative Balance Sheet, Horizontal Analysis ---------------------

1

Appendix G – Safeway, Inc., Comparative Balance Sheet, Vertical Analysis ------------------------Appendix H – Safeway, Inc., Comparative Income Statement, Horizontal Analysis –---------------Appendix I – Safeway, Inc., Comparative Income Statement, Vertical Analysis -------------------Appendix J – Common-Sized Balance Sheet Horizontal Analysis -----------------------------------Appendix K – Common-Sized Balance Sheet Vertical Analysis --------------------------------------Appendix L – Common-Sized Income Statement Horizontal Analysis -------------------------------Appendix M – Common-Sized Income Statement Vertical Analysis ---------------------------------References ---------------------------------------------------------------------------------------------------

6.0 Analytical Measures – Solvency and Profitability Analysis

Analytical Measures Whole Foods Market, Inc. (WFMI)

Safeway Inc.(SWY)

WFMI/SWY Ratios, 2007

2007 2006 2005 2007 2006 2005

Sol

venc

y M

easu

res

Working capital -116,530 114,211 254,146 -1128.9 -1035.7 -561.5 103.22Current ratio 0.85 1.22 1.61 0.78 0.77 0.87 1.09Quick ratio 0.13 0.17 0.90 0.17 0.15 0.17 0.76Accounts Receivable turnover

70.37 18.84 17.85 81.39 99.0 111.42 0.86

Number of days’ sales in Receivables

20.90 4.84 5.11 4.48 3.69 3.28 4.67

Inventory turnover 17.47 19.27 16.12 11.08 10.58 9.92 1.58Number of days’ in inventory

20.90 18.94 22.64 32.95 34.51 36.81 0.63

Ratio of fixed assets to long-term liabilities

2.26 143.64 81.55 2.28 1.94 1.62 0.99

Ratio of liabilities to stockholders’ equity

1.20 0.45 0.38 1.63 1.87 2.20 0.74

Number of times interest charges are earned

73.38 10,617.03 107.67 4.61 4.13 3.11 15.92

Pro

fita

bili

ty M

easu

res

Ratio of net sales to assets

2.51 6.83 6.34 6.25 6.11 5.76 0.40

Rate earned on total assets

0.07 0.10 2.76 0.08 0.08 0.06 0.88

Rate earned on stockholders’ equity

0.13 0.15 4.06 0.14 0.16 0.13 0.93

Rate earned on common stockholders’ equity

0.15 0.20 6.67 151.79 150.17 96.72 0.00

Earnings per share on common stock

1.29 1.41 0.99 1.99 1.94 1.25 0.65

Price-earnings ratio 37.1 40.55 63.12 16.98 17.46 18.41 2.18Dividends per share 0.68 2.47 0.39 0.25 0.22 0.10 2.72Dividend yield 0.01 0.04 0.01 0.01 0.01 0.00 1.00

Appendix A – Description of Analytical Measures Used

Method of Computation UseSolvency measures:

Working Capital Current Assets – Current Liabilities To indicate the ability to meet

currently maturing obligationsCurrent Ratio Current Assets / Current Liabilities

Quick Ratio Quick Assets / Current Liabilities To indicate instant debt-paying

Accounts Receivable

Turnover

Net Sales / Average Accounts Receivable To assess the efficiency in

collecting receivables and in the

management of creditNumbers of Days’ Sales

in Receivables

Average Accounts Receivable / Average Daily

Sales

Inventory Turnover Cost of Goods Sold / Average Inventory To assess the efficiency in the

management of inventoryNumber of Days’ Sales in

Inventory

Average Inventory / Average Daily Cost of

Goods Sold

Ratio of Fixed Assets to

Long-Term Liabilities

Fixed Assets (net) / Long-Term Liabilities To indicate the margin of safety

to long-term creditors

Ratio of Liabilities to

Stockholders’ Equity

Total Liabilities / Total Stockholders’ Equity To indicate the margin of safety

to creditors

Number of Times Interest

Charges are Earned

(Income Before Income Tax + Interest Expense)

/ Interest Expense

To assess the risk to debtholders

in terms of number of times

interest charges were earned

Profitability measures:

Ratio of Net Sales to

Assets

Net Sales / Average Total Assets (excluding

long-term investments)

To assess the effectiveness in

the use of assets

Rate Earned on Total

Assets

(Net Income + Interest Expense) / Average Total

Assets

To assess the profitability of the

assets

Rate Earned on

Stockholders’ Equity

Net Income / Average Total Stockholders’

Equity

To assess the profitability of the

investment by stockholders

Rate Earned on Common

Stockholders’ Equity

(Net Income – Preferred Dividends) / Average

Common Stockholders’ Equity

To assess the profitability of the

investment by common

stockholdersEarnings per Share on

Common Stock

(Net Income – Preferred Dividends) / Shares of

Common Stock Outstanding

Price-Earnings Ratio Market Price per Share of Common Stock /

Earnings per Share on Common Stock

To indicate future earnings

prospects, based on the

relationship between market

value of common stock and

earnings

Dividends per Share Dividends / Shares of Common Outstanding To indicate the extent to which

earnings are being distributed to

common stockholders

Dividend Yield Dividends per Share of Common Stock /

Market Price per Share of Common Stock

To indicate the rate of return to

common stockholders in terms

of dividends

Appendix B - Whole Foods Market, Inc., Comparative Balance Sheet, Horizontal Analysis

Appendix C - Whole Foods Market, Inc., Comparative Balance Sheet, Vertical Analysis

Appendix D - Whole Foods Market, Inc., Comparative Income Statement, Horizontal Analysis

Appendix E - Whole Foods Market, Inc., Comparative Income Statement, Vertical Analysis

Appendix F - Safeway, Inc., Comparative Balance Sheet, Horizontal Analysis

Appendix G - Safeway, Inc., Comparative Balance Sheet, Vertical Analysis

Appendix H - Safeway, Inc., Comparative Income Statement, Horizontal Analysis

Appendix I - Safeway, Inc., Comparative Income Statement, Vertical Analysis

Appendix J - Common-Sized Balance Sheet Horizontal Analysis

Appendix K - Common-Sized Balance Sheet Vertical Analysis

Appendix L - Common-Sized Income Statement, Horizontal Analysis

Appendix M - Common-Sized Income Statement Vertical Analysis