¶ … Financial Analysis of Mcdonald
A financial analysis McDonald's Cor
Company Overview
McDonald Corporation is a global company that conducts business in 117 countries. McDonald operates 32,737 restaurants and 26,338 franchises in the highly competitive fast food industry. Since 1940, McDonald has built a loyal customer base by continuing dedicating to customer service and providing high quality fast food for customers. Presently, McDonald could boast of over 60 millions customers and the company serves average of 64 millions customers daily. In the United States, and other countries where McDonald is operating, fast food business is very competitive. Despite the competition that McDonald is facing, the company has been able to record revenues of more than $16 billions in restaurants and revenues of more than $7 billions in franchise restaurants business. McDonald operates in six geographical locations. The company business operations are in the U.S., Europe, Middle East, Asia-Pacific, Latin America and Africa. In the U.S., McDonald total revenues account for 34%. In Europe, the company total revenues account for 40% while in Asia/Pacific, Middle East and Africa (APMEA) segment, McDonald total revenues account for 21%. The company records a remarkable success in the U.S. with more than 3.8% growth in eight consecutive years. In addition, McDonald has gained competitive market advantages in its international business operations. The U.S. And Canada are the McDonald major markets. In France, the UK, and Germany, the company market performances accounts for 5% of the total revenues in Europe. Similarly, the company market performances in Australia, Japan and China account for 50% of APMEA revenues.
McDonald continues to focus on customer experience, and achieve global success by providing branded affordability. In all countries that McDonald operates, the company has been able to achieve global comparable sales of increased of 5.0% and 4.9% in guest counts. Since 2007, McDonald financial performance rise steadily. The company recorded $2.4 billions in the net income in 2007. In 2008, McDonald net income increased to $4.3 billions, and the net income was $4.5 in 2009. McDonald recorded high success in 2010, the company recorded $4.9 billions in the net income and the comparable sale growth of 5.0% with earning per share rises by 11%. Typically, McDonald recorded "92 Consecutive months of global comparable sales increases through December 2010" (McDonald's Corporation Annual Report 2010, P 2).
The objective of the paper is to provide the financial analysis of McDonald.
Financial Analysis of McDonald Corporation
A company financial analysis is revealed by using various financial instruments to evaluate the financial strength and weakness of a company. A company financial analysis enhances an understanding of the financial stability of a company, and it enhances an investment decision of a company. Based on a company financial analysis, an investor could decide whether a company is liquid or solvent. To evaluate McDonald financial analysis, this paper focuses on the company balance sheet, income statement and cash flow statement. The paper uses the company financial data of the past three-year to evaluate the company vulnerability to current financial threats of recession, global competitions and higher interest rates.
Evaluation of McDonald Financial Data between 2007 and 2010
Between 2007 and 2010, McDonald has gained the market competitive advantages. The company total revenues were $22.7 billions in 2007. In 2008, the company total revenues increased to $23.5 billions. However, in 2009, McDonald total revenue fell to $22.7 billions. In 2010, McDonald recorded rise in the total revenues of $24 billions. Based on the company financial data, McDonald also recorded rise in net income in the past 3 years. In 2007, McDonald recorded $2.4 billions in net income. Likewise 2008, the company net income increased to $4.3 billions. In 2009, McDonald also recorded $4.5 billions, and 2010, McDonald recorded $4.9 billions in the net income. However, McDonald stocks performances are traded less than its median and mean target value. In 2010, the company stock close price was traded at $77.56 revealing a decrease of 0.5%. The low target was $73 and the mean target is $85.56.
The paper also uses the ratio analysis to determine the company financial health. The paper evaluates McDonald ratio analysis for the long-term investment.
McDonald Ratio Analysis for Long-Term Investment
Analysis of McDonald equity turnover reveals that the company equity turnover deteriorated between 2008 and 2009 and the company equity turnover slightly improved between 2009 and 2010. The McDonald equity turnover was 1.7.6% in 2008 and the company equity turnover decrease to 1.62% in 2009. However, the company recorded 1.65% in the equity turnover 2010. (See fig 1 McDonald equity turnover).In addition, the company total asset turnover deteriorated between 2008 and 2010. In 2008, McDonald recorded 0.83% in the asset turnover. However, between 2009 and 2010, the company recorded 0.75% in the asset turnover. (Fig 2 reveals McDonald asset turnover).
Fig 1: McDonald Long-Term...
Financial Statement Analysis The following is an equity research report on Starbucks. The company competes primarily in the quick service food industry, where it holds the #5 market share in the United States, and #1 in its segment of coffee (QSR Magazine, 2011). The company had revenues last fiscal year (ended 10/2/11) of $11.7 billion and net income of $1.245 billion. The current stock price is $43.91, which gives the company
Conduct a benchmarking analysis As explained by Prasnikar, Debeljak and Ahcan (2005) benchmarking depends on comparing between two activities of an organization and another. In our case, we shall compare McDonald's activities and those of its competitors, Burger King and Wendy's. • Best practices McDonald's as a main player in the fast food industry is concerned with best practices with the industry. To this end, the corporation has adopted some best practices that
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McDonald's the largest fast-food chain across the globe. This is through spanning of approximately 30,000 restaurants across the globe with the aim of maximizing its revenues and profits at the end of the financial year. McDonald's Organization aims at being the customers' favourite place and way to eat and drink as its mission to meet the needs and preferences of its consumers. The pattern of internationalisation of McDonald's Company proves
The former deducts the inventory figure from the current assets value. In the years under consideration, both the current ratio and the quick ratio of McDonald's decreased (see table 1). In that regard, the company's ability to settle its debts in the short run seems to have been impaired within the period under consideration. It is however important to note that with a current ratio and quick ratio of more
McDonalds works within the quick service industry, where they have a differentiated position (Mantkelow, 2014). Although low price is a starting point for firms in the industry, McDonald's is not the lowest-price competitor in the business. They try to use branding as a means of creating differentiation for their products, many of which have trademarks for their own (i.e. Big Mac, Quarter Pounder, McCafe). The company's strategy therefore relies heavily
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