Mcdonalds Financial Analysis

Topics: Fast food, Income statement, Hamburger Pages: 70 (7522 words) Published: November 30, 2011
Table of Contents
1. Corporation Overview 3
2. Financial Statements 4
2.1 Income Statement 5
2.1 Balance Sheet 6
2.2 Statement of Cash Flows 8
2.3 Statement of Owners Equity 8
3. Financial Statement Summary 9
4. Ratio Calculation 10
4.1 Liquidity ratios 10 4.2 Asset management ratios 11
4.3 Debt management ratios 11
4.4 Profitability ratios 12 4.5 market value ratios 13
5. Ratio Comparison with Industry 14
6. Key Statistics 17 7. Other Important Information 20
8. Recommendation 26
9. References 28

McDonald's Financial Analysis
In a country where the fast food industry is huge and where obesity rates are sky rocking it is interesting to see if the menus offered by the yellow and orange clown besides making people fat are also making investors’ wallets grow in size. McDonald’s (MCD) has many competitors in the fast food industry but it is considered a leader in its sector and throughout this paper it will be discussed if this company is a good financial investments based on the organization financial results. By calculating different financial and managerial ratios it will be established if it offers the best menu to the hungry investor. Corporation Overview

McDonald’s is part of the restaurant scene and more precisely of the fast food industry. It initiated operations in 1940 and now it is a “food service retailer with more than 32,000 local restaurants serving more than 64 million people in 117 countries each day” (McDonald’s website, 2011). It serves menus consisting of hamburgers, fries, breakfast sandwiches, chicken items (like nuggets or fried strips), sodas and lately salads and coffee products. The organization initiated business in the United States and now it operates under the franchise model (more than 80% of the restaurants are franchises) having a global presence. It has more than 1.7 million worldwide employees and currently the firm is under the direction of Jim Skinner, Vice chairman and CEO. The organization headquarters complex is located in Oak Brook, Illinois. The company has many competitors and it shares the market with other organizations like Burger King. “To a lesser degree, it also competes against other fast-food restaurants such as Subway, Yum! Brands, Inc.’s Taco Bell, Pizza Hut and Kentucky Fried Chicken, casual restaurant chains, such as Applebee’s, Chili’s, Ruby Tuesday’s and “fast casual” restaurant chains, such as Panera Bread, as well as convenience stores and grocery stores. Non-FFHR (fast food hamburger restaurant) based chains, such as KFC and Pizza Hut, have many outlets in international markets that compete with McDonald’s. In addition, the company competes internationally against local FFHR chains, sandwich shops, bakeries and single-store locations.” ("Burger King Holdings", 2011) Financial Statements

McDonalds Financial Statements
Income Statement
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