Integrated report for McDonald's Corp.
Integrated report for McDonald 's Corp. McDonald’s Corporation, which is famous for its BigMac and Happy Meal all over the world, is the world’s largest chain of hamburger fast food restaurant. The business started in the United Stated in 1940 as a barbecue restaurant, but the business has boomed in the following decades and ranked No. 111 of Fortune 500 in 2013 (CNN Money). For 2013, the company had total revenues of 28,105,700 USD and had a net income of 5,585,900 dollars. Among these huge revenues, most of them come from the sales of meals, however, a large part of total revenues come from bundle sales of toys in the Happy Meal. Since McDonald’s Corp. made Happy Meal as their earnings growth target in 1997, it has become a large part of revenue in the company’s annual report (Cibson). The company has a clear annual financial report on the YAHOO！Finance website and all data shows below come from their website. The total revenues, cost of goods sold, and expenses for 2012 and 2013 are shown in the company’s income statement. For year 2014 to 2018 shown in the graph, we assume that the sales revenues will increase by 10% each year, cost of goods sold will increase by 8% each year, selling expenses will increase by 2%, and any other expenses will increase by 1%. The 5 year trend analysis for the McDonald 's Corp. is shown below.
It shows that the operating income is increasing steadily according to the assumptions if the market is stable. The result shows that the operating income increases to 17 million in 2018 from 8 million in 2012, which is an increasing of 105% ignoring the inflation. With the revenues increasing, the expenses also increase on a reasonable scale. As the spreadsheet below shows, the future of the company looks promising.
As the auditor of the company, risks should be evaluated in more realistic projections in my opinion. If the market is strong as we image on the above, the McDonald’s Corp will double its profits in the following 5
It shows that the operating income is increasing steadily according to the assumptions if the market is stable. The result shows that the operating income increases to 17 million in 2018 from 8 million in 2012, which is an increasing of 105% ignoring the inflation. With the revenues increasing, the expenses also increase on a reasonable scale. As the spreadsheet below shows, the future of the company looks promising.
As the auditor of the company, risks should be evaluated in more realistic projections in my opinion. If the market is strong as we image on the above, the McDonald’s Corp will double its profits in the following 5
References: Ryan Guenette, “McDonald’s: Strengths, Weaknesses, Opportunities, Threats” November 8, 2012. Richard G. "Executives of McDonald 's Corp. make Happy Meal of Earnings Growth Target." Wall Street Journal Nov 14 1997, Eastern edition ed.: 1. ProQuest. 23 Mar. 2014 . "Research and Markets; Fast Food Market in the US, Likely to Register A CAGR Growth of Around 4% in the Short Period Spanning from 2011 to 2014." Economics Week (2011): 363. ProQuest. 25 Mar. 2014 . YAHOO! Finance, Website