...Financial Analysis XACC/280 University of Phoenix Financial Analysis The financial health of an organization is an essential piece of information used by investors to assess how well the organization is performing and to make informed decisions about whether to purchase stock or remain invested. The annual report of a publicly traded company is available for anyone to review; it discloses the financial health of the company to potential or current investors. Investors use the annual report to determine what the company plans to do in the future, as well as compare the financial information from the previous year(s). Annual reports show if the company's sales, assets, and liabilities have increased, decreased, or stayed the same. The following is an analysis of McDonald’s Corporation 2010 Annual Financial Report, and will compare the financial health of the company, explain why it is worth investing, and provide analyses to support the investment decision. McDonald’s was ranked 111 on Fortune 500’s annual ranking of America’s largest corporations in 2010 (Fortune 500, 2011). The restaurant is one of the largest fast-food chains in the world and experienced many financial highs in 2010. Revenues increased 6% and the guest count rose by 4.9%, in addition to the Company returning $5.1 billion to shareholders (McDonald’s Corporation, 2011, p.11). These are just glimpses of what the organization accomplished over the course of a year. In order to provide more information on McDonald’s...
Words: 3060 - Pages: 13
...Financial Analysis McDonald’s Amber van Berkel 384941 Roos Bijen 336432 Lotte Bergsma 353604 Stenden University Hospitality Operations Environment Group A 18 / 05 / 2015 Appendix 4: Scoring Rubric assignment Unit 3 Financial Analysis Group number: A Module period: 4 Academic year: 2 Name assessor: Student name | Student number | Analyses | Grade | Amber van Berkel | 384941 | Income statement | | Lotte Bergsma | 353604 | Balance sheet | | Roos Bijen | 336432 | Cash flow statement | | | | | | | | Elements | | Scoring Rubrics | | Group/ individual | contents | Score 1-10 | remarks | Part A Getting to know the company (30%) | group | * Business drivers * 5 year record * Directors review | | | Part B: The financial statements (30%): | individual | Income Statement | | | | | Balance Sheet | | | | | Cash Flow Statement (*) | | | Part C (30%) Investors perspective | group | * Risk analysis * performance * overall conclusions (A+B+C) | | | Part D presentational aspect (10%) | group | * Lay-out * Grading sheet * Quality and use of English | | | | | | Preface During the second year in the module Hospitality Operations Environment of the International Hotel Management School a financial analysis has to be made. This financial analysis is about the company MacDonald’s. Findings, trends and conclusions found in the annual reports of 2013 and 2014 of the McDonald’s Corporation...
Words: 3462 - Pages: 14
...REPORT ON THE FINANCIAL EVALUATION: MCDONALD'S CORPORATION AND YUM! BRANDS REPORT ON THE FINANCIAL EVALUATION: McDONALD'S CORPORATION AND YUM! BRANDS TAMARA AYRAPETOVA The aim of this paper is to perform financial analysis by using financial ratios and to comment, evaluate, and understand the origins of the results by using the comparison of two companies chosen as a case study. The McDonald's Corporation is the largest fast food restaurant in the world. McDonald's Corporation statistics base it in over 119 countries and it serves more than 68 million customers daily. The company's revenues are coming not only from its primary products like hamburgers, cheeseburgers, etc., but also from rent, royalties, and fees paid by the franchisees. This report will look at the financial statements of the McDonald's Corporation over the past 3 years starting from 2010 through 2012. The author of the paper will apply financial ratios to analyze company's position and to identify patterns and trends. She will then compare the results of the analysis with one of the biggest competitors of McDonald's - Yum! Brands Inc. and the industrial averages. Yum! Brands Inc. is a US based corporation. It includes famous brands like KFC and Pizza Hut in their chain. Currently Yum! Brands are the largest competitors McDonald's has in the fast-food industry. To compare the two companies financial statements will be taken from Yahoo Finance (2013). Unauthenticated Download Date | 12/14/14 11:28 PM ...
Words: 7529 - Pages: 31
...Statistical Tools for Financial Research Anna Hemmer University of Phoenix Statistical Tools for Financial Research The financial condition of an organization is identified through data provided in formal records called financial statements. Financial statements provide an accurate account of a company’s financial position and cash flow of the business. Stakeholders used the data to make decisions regarding future purchases, investments, and profitability of the organization. Analyzing financial statements consists of using various methods (statistical tools) including comparative statements, schedule of changes in working capital, common size percentages (analysis), fund analysis, trend analysis, and ratio analysis. The purpose of this paper is to review the financial statements of one domestic, and one global organization from the Financial Times 500. The two companies for review are the McDonald’s and Samsung organizations. The data provided in the financial statements will convert into a ratio analysis. Common size analysis, and accounting analysis limitations are tools for review. The pros and cons of each of these statistical tools will also be discussed. To understand the importance of statistical tools, a review of ratio analysis, common size analysis, and accounting analysis limitation will be the starting point for this paper. Ratio Analysis Ratio analysis is the most powerful tool of financial analysis (Accounting for Management, 2012, para. 1) used...
Words: 2386 - Pages: 10
...Financial Analysis of the McDonald’s Company Stock ticker symbol, exchange where traded NYSE: MCD Address of company headquarters McDonalds Corporation One McDonald’s Plaza Oak Brook, IL 60523 Company phone number: 630.623.3000 Company Overview The McDonald’s Corporation is a global company that conducts business in 117 countries. McDonald’s operates 32,737 restaurants and 26,338 franchises in the highly competitive fast food industry. Since 1940, McDonald’s has built a loyal customer base by continually dedicating themselves to customer service and providing high quality fast food for its customers. Presently, McDonald’s could boast of over 60 million customers and the company serves average of 64 million customers daily. In the United States, and other countries where McDonald’s is operating, fast food business is very competitive. Despite the competition the company is facing, McDonald’s has been able to record revenues of more than $16 billion in restaurants and revenues of more than $7 billion in its franchise restaurant business. McDonald’s 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’s 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’s total revenues account for 21%. The company records a remarkable success in the...
Words: 2764 - Pages: 12
...Introduction McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people. Although it has consistently outperformed its rivals, McDonald’s is facing same pressures from global economy and rising ingredient costs that are squeezing the entire industry. Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. Notably, McDonald's has increased shareholder dividends for 25 consecutive years, making it one of the S&P 500 Dividend Aristocrats. In October 2012, its monthly sales fell for the first time in nine years. This paper will discuss the financial statement analysis of McDonald’s Corporation. The purpose of financial statement analysis is to examine 2011 and 2012 financial data so that the company’s performance and financial position can be evaluated and future risks and potential can be estimated. Financial statement analysis will provide valuable information about trends and relationships, the quality of the company’s earnings, and the strengths and weaknesses of its financial position by analyzing its profitability, liquidity, activity and debt. Financial statement analysis will also help to improve financial decision-making and strategic planning. Profitability Profitability is determined by analyzing Return on Assets(ROA)...
Words: 1267 - Pages: 6
...restaurants are assuming the costs rather than increasing the cost of food for consumers. According to Jim Yin (n.d.), CFA, “Year to date through February 17, the S&P Restaurants Index was up 4.4% versus an 8.7% increase for the S&P 1500 Index. In 2011, the sub-industry index outperformed the 1500, with a gain of 27.9% versus a 0.3% decline.” Financial Position of McDonald’s Corporation (MCD) McDonald’s Corporation (MCD) is the leader in global foodservice retail with more than 33,000 restaurants worldwide and 1.7 million employees in 119 countries (“McDonald’s Corporation”, 2012). Approximately 68 million people eat at McDonald’s each day (“McDonald’s Corporation”, 2012). With international growth and globalization on the rise for many quick service restaurants, such as Starbucks and Yum!, McDonald’s Corporation has also taken advantage of worldwide global growth. McDonald’s has grown their market in China, India, and other foreign countries (Murphy, 2011). According to Standard and Poor’s (2012), McDonald’s Corporation revenues have increased from $22.7 million in 2009 to $27 million in 2011. Additionally, McDonald’s operating income has increased since 2006 and their cash flow and current assets have increased steadily since 2009 (Standard and Poor’s, 2012)....
Words: 760 - Pages: 4
...Executive Summary This report contains the strategic audit of McDonald’s. The instruments use the external and internal aspects to analysis the opportunities, threats, strengths and weaknesses (SWOT analysis and SWOT matrix). Analysis of the company's position has been undertaken different technology models have also been applied in to undertake the analysis of the technology practices in the company. In the end suggestions and recommendations are presented in to improve the competitive position of the company. The analysis of external environment includes three threats and three opportunities. The opportunities included global expansion, the trend of healthier eating, and the growing market for coffee drinks. The three threats came from social activists, the large amount of competition, and the unhealthy food image in the eyes of the public. The analysis of internal environment includes three strengths, which are which are global expansion, specializing training and efficiency of the top management; two weaknesses which are exploited workers and damaging the environment. McDonald’s corporation had four strategies include expand the coffee market domestically, as well as internationally; develop more eco-friendly methods of operating; develop a method to choose where to locate new stores; expand the healthier food options on their menu. Introduction McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers...
Words: 3454 - Pages: 14
...McDonald’s Case Analysis Nick Brown BUSN412 Business Policy May 14, 2010 CASE ANALYSIS McDonald’s COMPANY NAME: McDonald’s Corporation INDUSTRY: Food McDonald’s Corporation COMPANY WEBSITE: (www.mcdonalds.com) COMPANY BACKGROUND: Ray Kroc found McDonald’s corporation, a successful fast food restaurant, in 1955 were his vision was to create McDonalds restaurants all over the U.S, and within 3 year of establishing the franchise the corporation was already selling its 100 millionth burger. The franchise has now became a successful global fast food restaurant that sells a variety of items and has a unique philosophy that Ray Kroc envisioned with building this franchise which was “To Build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation”(McDonald’s Corporation 2009). He wanted, “To serve burgers, buns, fried and beverages that tasted just the same in Alaska as they did in Alabama”(McDonald’s Corporation 2009). The case study concentrated on the financial strengths and struggles of the franchise. With the early millennium years 2001, 2002 and 2003 the franchise seen a tremendous dip in total revenue and net profits, it wasn’t until 2007 when the company seen a turnaround in total revenue and net profits. Things were starting to look up for franchise. Currently the CEO at McDonald’s Corporation is Jim Skinner and he is providing the same vision that Ray Kroc was envisioning when he opened the doors. The...
Words: 1558 - Pages: 7
...University of Greenwich Strategic Financial Management (FINA1035) Programme: UOG (3+0) BAAF Student ID: 000721005 Submission Date: 10th February 2014 Content Page 1. Introduction 3 Internal Analysis 2. Financial Analysis 4 3. Human Resource Management(HRM) Analysis 7 4. Marketing Analysis 8 5. Operational Analysis 10 6. Strength and Weakness of the Company 11 External Analysis 7. P.E.S.T.E.L. Analysis 12 8. Porter’s 5 forces 14 9. Critical Success Factors 16 10. Marketing Analysis 16 11. Opportunities 17 12. Threats 17 Current Strategies 13. Strategic Position 18 14. Proposed Strategies 18 15. Selection of winning Strategy: Feasibility 19 16. Description and Risk Assessment 20 References 21 Appendices 23 1. Introduction. Note: “All work within this report is taken from the case study unless referenced otherwise”. McDonald’s started as BBQ restaurant by (“mac and dick”) which also known as Maurice and Richard. The concept of the McDonald’s at that time was a typical drive in restaurant that offers variety of BBQ menu to choose from. The brothers realised that it is important for them to highlight the menu that get the intention the most. Mac and Dick eliminated McDonald’s carhops’ concept to make McDonald’s as a self- service operation. They also narrowed down the menu...
Words: 5883 - Pages: 24
...Financial Analysis of the McDonald’s Corporation MCD, NYSE (New York Stock Exchange) One McDonald's Plaza, Oak Brook, IL 60523 Map +1-630-6233000 (Phone) +1-630-6235700 (Fax) Abstract McDonald’s is the most famous and well-known fast-food company in the world. This case study examines McDonald’s from a financial standpoint. This case study will be broken down in three parts. Discussed first will be a full description of McDonald’s corporation, including its background, followed by a financial overview with comments for each financial category reviewed, the a comparison of financial ratio’s between McDonald’s and it rival Burger King derived from their 2009 and 2009 annual reports. Finally a support will be provided based off of all findings. Part One: Company Description The McDonald’s Corporation is a well-known restaurant chain that franchises and operates fast food restaurants worldwide. Reuters (2011) states that each restaurant is operated either by the Company or by franchisees. This includes conventional franchisees under franchise arrangements, and foreign affiliated markets and developmental licensees under license agreements. The company’s mission is to be our customers' favorite place and way to eat (McDonald’s, 2011). Company history McDonald’s history originates in 1940, when it started out as McDonald’s Bar-B-Que by Dic and Mac McDonald. In 1948 McDonald’s was officially founded serving only nine items, which included a 15-cent hamburger...
Words: 2116 - Pages: 9
...McDonald’s Financials / Problem Sets ACC/300 McDonald’s Financials The market growth is increasing for the reason of occupied clients not having time to prepare a dish and the comfort factor. The food industry is also expanding very quickly because of the circumstances international markets offer. In McDonald’s example, they absolutely have a competitive edge for they have previously influenced many countries and they are successful in these countries. Every company in the food industry is vulnerable of dissipating clients, thus, the industry must depend solely on their brand’s appearance and the condition of their goods. McDonald’s have numerous adversaries but they are presently at the top of the industry in market capitalization with a $39.31 billion cap (McDonald’s Corporation, 2005). Summary organizations' financial statements: In concluding the financial well being and expansion of the McDonald’s Corporation, a study of their financial records in the four year course was organized. These financial reports involved a study of their balance sheets, income statements and cash flow statements from the start of 2008 until 2011. The balance sheet for the four year course involves a summary of the company’s assets and also its equity. In rechecking the balance sheet, a person can infer that cash and equivalents for the year 2008 were documented to be at $2,063.4 million. The corporation encountered a reduction...
Words: 1939 - Pages: 8
... This assignment will discuss current macroeconomic conditions in the US and how these conditions have affected two monopolistically competitive firms, McDonald’s and Verizon. This paper will explore how the two companies responded to the macroeconomic conditions in terms of their stock performance, current and future sales revenue, current and future products, labor costs and hiring decisions. 1.1 The Current Economic Conditions The current macroeconomic situation is fragile. The US economy is clearly in terrible shape, but what is unclear is how we got there. Many experts trace the origins of the current economic situation to the housing bubble that came about earlier this decade (Tanneeru, M). According to the estimate, the real GDP of the US increased .25 of 1 percent over its level in the 1st quarter of 2011. The growth rate of the economy is still volatile and while any increases in real GDP are welcome, they are not sufficient to reduce the unemployment pool (Watkins, T, 2011). 1.2 McDonald’s and Verizon McDonald’s Corporation franchises and operates McDonald’s restaurants in the global restaurant industry. They serve a varied, limited, value-priced menu in more than 1,000 countries worldwide. By adding Dollar Menu items and introducing high-margin beverages such as coffee and fruit smoothies, McDonald’s has broadened its appeal beyond the young men who account for the biggest share of sales at mother other fast food chains (Reuters, 2011). Verizon...
Words: 1498 - Pages: 6
...MarketLine Case Study McDonald’s Corporation Case Study Remaining relevant in a health conscious society Reference Code: ML00001-040 Publication Date: January 2012 WWW.MARKETLINEINFO.COM MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED MCDONALD’S CORPORATION CASE STUDY © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED ML00001-040/Published 01/2012 Page | 1 OVERVIEW Catalyst McDonald's Corporation is one of the world's largest foodservice retailing chains. The company is primarily known for its burgers and fries, which it sells through more than 32,000 restaurants in 117 countries. In 2010, the company served an average of 64 million customers per day. It primarily operates in Europe, Asia Pacific, and the Americas. The company is headquartered in Oak Brook, Illinois and employs about 400,000 people. McDonald’s has been able to successfully increase revenues and profits in recent years in spite of much negative publicity and an increasingly health conscious public. This case study shows how the company has achieved these goals in a difficult trading environment. Summary McDonald’s has, to a great extent, defied recent difficult economic conditions and continued to experience strong sales and profit growth in recent years, as it has been able to attract diners with an improved and expanded product range while remaining competitive on price. McDonald’s has been the target of much criticism in recent...
Words: 5429 - Pages: 22
...summary……………………………………………… page 3 II. Situational analysis……………………………………………………. 4 III. Marketing strategy…………………………………………………... 7 IV. Manufacturing plan………………………………………………….. 10 V. Financial plan………………………………………………………... 10 VI. Human resources plan……………………………………………….. 11 I. EXECUTIVE SUMMARY: McDonald’s Corporation is a “Centralized, International company”, which competes in the fast food industry supplying hamburgers, French fries and other consumable items using standardization, heavy expansion and branding as the driving force. McDonald’s operates in over 121 countries and has over 30,000 restaurants worldwide. McDonald’s utilized an intense, rapid expansion into foreign countries through three primary methods, franchising, company owned restaurants, and joint ventures. With the majority of international restaurants stemming from franchising agreements, McDonald’s management relied on this method to aid in the acceptance of a new style of eating into unfamiliar markets. With minimal risk and maximum gains, franchising continues to contribute heavily to McDonald’s international success. With a centralized, international structure, McDonald’s keeps a tight grasp on operations, cost and quality. With an ethnocentric management strategy, McDonald’s relies on domestic based logic and attitudes and transfers them to their international outlets and restaurants. In order to control its overseas operation, McDonald’s uses a combination of two approaches...
Words: 1839 - Pages: 8
