Learning Team Global Environments and Problem Sets
Learning Team Global Environments and Problem Sets In the restaurant business there is a household name that controls a big part of the market share and has experienced a tremendous growth since it was founded in the 1940’s. McDonald’s growth has not just been in the United States but has grown rapidly grown in the global market. McDonald’s has adapted their business model to global environments by maintaining consistent accounting standards. Reporting debt securities, common stock, equity, and any financial activities on financial statements is a common practice by the McDonald’s corporation which has assisted them to plan future financial growth. Debt securities are reported on financial statements which are on a McDonald’s balance sheet. Accounting professionals should classify the different types of debt security since it will require a different accounting method. Some the debt securities will fall under current assets and non-current assets. McDonald’s is bound by following the generally accepted accounting principles or GAAP like any other company as debt security is accounted for. McDonalds Corporation has an estimated 900,000 shareholders and records stock as common stock on their balance sheet under liabilities. McDonald’s discloses the par value of the stock that is shared with investors. Common stock has a par value that is required amount needed to contribute to the purchase the shares. The par value is very similar to a stock price, the difference is that the stock price is what it is bought and sold in the stock market. Today McDonald’s common stock value is going for $101.99 a share and it is trading for $103.59. Previous recorded high for McDonald’s in stock has been record as $102.41 for a record fifty-two weeks and the report low has been $83.31 for fifty-two weeks. McDonald’s stockholders’ equity is listed on the balance sheet. The common stock has a value $101.99, with 1.0 billion shares that are outstanding. In their financial statement they authorize the amount that the McDonald’s corporation reports to the state the numbers of shares they will be selling and their price. Typically the state is the one that authorizes the shares. McDonald’s corporations must release the amount of shares it is planning to authorize. The total common stock equity for McDonald’s is valued at fifteen billion dollars and has seen a nine percent increase over the last four years. On the balance sheet retained earnings totaled thirty-two billion dollars and have seen an eight percent increase on average over the last for years. McDonald’s discloses the number of issued shares any number of shares issued on their financial statement. Looking at McDonald’s consolidated statements of operations show a net income five billion and a net income of $5.41 per share. The diluted value is at $5.36 per share. Dividends that were declared per common share totaled seventy cents per share in 2012 by their board of directors. The consolidated statements of cash flows record payment of dividends on common stock to shareholders. Payment of dividends on common stock totaled $2.9 billion in 2012. The McDonald Corporation would invest in stock and debt securities to earn more money until the corporation decides to invest money into certain projects of their own. They can also decide to return the cash back to the shareholders in the form of stock purchase or dividends. The investment in debt securities could perhaps be a hedge against their own interest rate exposure. The corporation’s relative risks and rewards of equity versus debt securities are various. On one hand, raising cash through debt is considered to be cheaper as the company takes out a loan for a period of time, which the company either pay (or accrue) interest over the life of the loan. It is also considered cheaper because the Interest on the debt can...
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