In this paper I am going to analyze and compare the profitability ratios of Mac Donald company and KFC company. The profitability ratios are used to measure a company’s ability according to their profit. They help us see if a company can ………………. I am going to measure this ability for the Mac Donald and KFC companies. The profitability ratios I am going to use are 1) Gross profit margin, 2) Operating profit margin, 3) Effective tax rate, 4) Net profit margin, 5) Cash flow margin, 6) Return on assets, 7) Return on Equity, 8) Cash return on assets, 9) Earnings per common share, 10) Price to earnings, 11) Dividends per share, 12) Dividend payout and 13) Dividend yield. * Gross Profit Margin
We calculate this profitability ratio by dividing the gross profit of the company by its net sales. This ratio measures………………………...
I am going below to calculate, analyze and compare the gross profit margin for the Mac Donald and KFC companies for the years 2009 and 2010.
All the numbers of the companies are in millions. Mac Donald Year 2009 Year 2010
Gross profit (ap. ) $ 3,416.3 $ 4,368.5
Net sales (ap. ) $ 2,988.7 $ 2,924.7

Gross profit margin 1,14 times 1,49 times

KFC Year 2009 Year 2010
Gross profit (ap. ) $ 3,416.3 $ 4,368.5
Net sales (ap. ) $ 2,988.7 $ 2,924.7

Gross profit margin 1,14 times 1,49 times

* Operating Profit Margin
We calculate this profitability ratio by dividing the operating profit of the