Preview

Financial Analysis Case Study

Powerful Essays
Open Document
Open Document
2971 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Financial Analysis Case Study
McDonald's Financial Analysis Case Study

The purpose of this study is to assess a company’s future financial health. This study provides a "hands on" experience to synthesize the finance concepts that we learned throughout the course by applying them to a "real life" individual or organization. On this study I elected to assess McDonald Corporation’s future financial health.
McDonald’s Corporation franchises and operates McDonald’s restaurants in the global restaurant industry. These restaurants serve a menu at various price points providing value in 119 countries globally. As of December 31, 2011 out of the 33,510 restaurants in 119 countries around the world 27,075 were franchised or licensed (including 19,527 franchised to conventional franchises, 3,929 licensed to developmental licensees and 3,619 licensed to foreign affiliates primarily in Japan and the Company operated 6,435. McDonald’s menu includes Big Mac, Quarter Pounder with Cheese, hamburgers and cheeseburgers, Filet-O-Fish, Chicken McNuggets, some chicken sandwiches, salads, Snack Wraps, French fries, oatmeal, shakes, sundaes, McFlurry desserts, soft serve cones, pies, soft drinks, McCafe beverages, coffee and other beverages.
McDonald’s, the world famous fast food restaurant has been successful across the years. Over the years, they have ensured there is no change in their services, and product line, but kept the quality high and maintained the standards across their branches. Not only do they offer customers a delicious meal, but also offer something for the children and adults alike- their happy meal! Children look forward to the doll inside, while parents look forward to watching their children enjoy a meal without a complaint. Now we’ll see and find out what was their growth? How much was their annual sales? And any future plans.
Investors and other external users of financial information will often need to measure the performance and financial health of an organization. This is done in

You May Also Find These Documents Helpful

  • Good Essays

    Cango Financial

    • 1115 Words
    • 5 Pages

    The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company.…

    • 1115 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    McDonald's franchises and operates McDonald's branded fast food restaurants all over the world. The company is one of the world's largest food service retailing chains. At the end of December 2014, the company operated over 36,000 restaurants in over 100 different countries. Of these, 24 percent were licensed to foreign affiliates, 57 percent were franchises, and over 18 percent were company operated.…

    • 173 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants. There are over 31,000 McDonald’s locations worldwide primarily selling hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, and desserts.…

    • 1176 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Financial Analysis

    • 348 Words
    • 2 Pages

    X-Ray machine – Capital Lease – Useful life is 15 years; Option of buying the equipment at a bargain price later…

    • 348 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Financial Analysis

    • 1233 Words
    • 5 Pages

    Fiscal policy refers to use of government revenue collection and expenditure to influence its economy. Fiscal policy targets a country’s budget of its economic activities. Government can adjust its spending and taxation levels through changing the income distribution, resource allocation or level of aggregate demand and economic activity. In the context of Brazil, in 1970s, the government put some stringent penalties to regulate its imports. The government kept the import tax and penalties high. To implement the policies, the government applied tax deduction on imports, for instance, a Brazilian resident who imported intangibles like knowhow, software and royalties would be subject to withholding tax from remittances, this was equivalent to 25% of an individual registered capital. If a Brazilian taxpayer bought software from abroad, worth £100, the seller would be receiving £15 while the £85 would be remitted to the government. Brazilian tax rule treated any payment of intangible imports as a profit distribution regardless of their justification. This meant that in any importing individual or company would pay more than its income a year (Poterba, 1999).…

    • 1233 Words
    • 5 Pages
    Better Essays
  • Better Essays

    Finance Case Study

    • 1122 Words
    • 5 Pages

    Over the past years, Horniman Horticulture ran very well under the control of Bob and with the overseen of its finance by Maggie. Firstly, no debt happened through the management. Secondly, their equity capital kept increasing which resulted from the revenue was $788,500 in 2002, however, it was $1,048,800 in 2005 with the revenue increased by 15.5% based on 2004. It is obviously that the business had a overall prospect. Finally, their gross profits, operating profits and net profits keep increasing from year 2003 to 2005 as well as the changes in their gross margin, operating margin and net profit margin. In general, the business operated perfect and had a booming future.…

    • 1122 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Financial Analysis

    • 787 Words
    • 4 Pages

    Horizontal Analysis - The financial statements of Competition Bikes indicates a reverse in sales between fiscal years 6 and 7 where revenues increased to 37.5% and then a decreased 16.3% between fiscal years 7 and 8. This apparent trend is an indication that the company is moving in the wrong direction as sales have decreased. Not only is sales decreasing because of the current economic situation, but customers who also sponsor professional riders are decreasing. Reduction of sponsors will decrease advertising resulting in reduced sales. The trend in sales will have ramifications through out the entire organization as is demonstrated in further review.…

    • 787 Words
    • 4 Pages
    Good Essays
  • Good Essays

    The following represents some of the questions that seem important in assessing the future financial health of the company. The key issue is whether or not the company's goals, strategy, investment requirements and financing capabilities are in balance.…

    • 521 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Financial Analysis

    • 787 Words
    • 3 Pages

    The turnover rate tells investors what percentage of the portfolio value was bought and sold throughout the year. The higher the turnover rate, the higher…

    • 787 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Financial Analysis

    • 4153 Words
    • 17 Pages

    Weaknesses  Small manufacture, low funds and revenue  Relies on brokers that may not be adequate for supermarket channel  Current marketing strategy based only on nature store channel…

    • 4153 Words
    • 17 Pages
    Powerful Essays
  • Powerful Essays

    Evaluation of Income Statement 19 A. Profitability measures (from the ratio analysis above) 19 B. Changes in accounts and categories 19 IV. Analysis of Cash Flows 20 A. Ability to generate cash flows in the future 20 B. Capacity to meet obligations for cash 20 C. External financing needs 21 D. Management of investing activities 23 E. Implementation of financing and investing strategies 24 V. Evaluation of Financial Statements 24 A. Common Size Statements 24 a. Common Size Balance Sheet 25 b. Common Size Income Statement 26 B. Short-term debt and liquidity 27 C. Capital structure and long-term solvency 27 D. Operating/sales performance 28 VI. Outlook, Summary, and Conclusions 28 A. Outlook for performance 28 B. Investment potential 28 C. Credit assessment 29 D. Strategies to improve performance 29 E. Summary and conclusions 29 VII. References 30 VIII. Appendix A – Calculations 31 I. Firm, Industry, and…

    • 9007 Words
    • 37 Pages
    Powerful Essays
  • Best Essays

    Financial Analysis

    • 5400 Words
    • 22 Pages

    Bibliography: Associated British Foods plc. (2010). ABF annual report. Retrieved November 2, 2011, from http://www.abf.co.uk/: http://www.abf.co.uk/uploads/abf-annual-report-2010.pdf…

    • 5400 Words
    • 22 Pages
    Best Essays
  • Good Essays

    Financial: survival of company, success or growth, prosperity which they look by measuring ROCE, cash flow, revenue growth etc.…

    • 920 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Mcdonald's Empire

    • 1733 Words
    • 7 Pages

    "Are you green and growing or ripe and rotting?" (Kroc, 1978) Ray Kroc was a very intelligent man but not in the fact that he knew the burger business. Ray Kroc knew the entrepreneur business of making money. Ray Kroc was an entrepreneur not an owner of a hamburger place. Looking over his legacy, he understood the importance of many variables in business. Planning being at the forefront with globalization, technology and then later the understanding and opportunity for environmental scanning.…

    • 1733 Words
    • 7 Pages
    Better Essays
  • Best Essays

    It has segments in the US, Canada, Europe, Asia, Middle East and Africa. As of Dec 2012, McDonald’s Corp had a total of 34,480 restaurants in 119 countries with a workforce of approximately 440,000 employees. The number of restaurants has risen up compared to 33,510 restaurants as reported at the end of 2011. Out of this number, 27,882 are franchised or licensed and the other 6,598 are operated by the corporation.3 More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local owners,…

    • 2954 Words
    • 12 Pages
    Best Essays