Financial Analysis of the McDonalds Company

Financial Analysis of the McDonalds Company

Stock ticker symbol, exchange where traded _________

Address of company headquarters _________

Company phone number __________

Your name, etc.

PART 1, COMPANY OVERVIEW:

a.  Brief description of the company (one paragraph, briefly summarizing the company’s business)

b.  Company history (origin, major developments, etc.)

c.  Organization (describe how the company is structured)

d.  Main products and services (describe what the company sells; how it makes money)

e.  Geographic area of operations (describe where the company sells its products)

f.  Recent developments (list recent major news stories, if any)

PART 2, FINANCIAL OVERVIEW:

a. Sales and Income Record:
————- Fiscal Years ————-
2008    2009    2010    2011    2012

Sales                          ____    ____    ____    ____    ____

Percent change in
sales each year                          ____    ____    ____    ____

Net Income                          ____    ____    ____    ____    ____

Percent change in
net income each year                      ____    ____    ____    ____

GRAPH OF SALES & NET INCOME, FY 2008  2012

|
|
|      (Plot Sales and Net Income for the
|        last five fiscal years on the graph)
|
|      (Recommend you prepare the graph in Excel,
|        then copy and paste it into the report)
|
|
|
|        |        |        |        |
2008  2009    2010    2011    2012

COMMENTS: Comment on the trends you see in your numbers and on the graph.

Be sure to include comments!  The numbers and the chart are meaningless by themselves.  Comment on what you see.

b.  Expense Distribution:
FY 2012
Major Expenses:
________
(list the major expense categories    ________
from the latest income statement)  ________

PIE CHART OF EXPENSES, FY 2012

Note – Do not “explode”
the pie slices

COMMENTS: Comment on the company’s expense distribution.

c.  Assets Distribution:
Year-end FY 2012
Assets:
Cash                                              ________
Accounts receivable                      ________
Inventory                                      ________
Fixed Assets                                  ________
Other Assets                                  ________

PIE CHART OF ASSETS, Year-end FY 2012

COMMENTS: Comment on the company’s asset distribution.

c.  Capital Structure:
Year-end FY 2012
Capital Structure:

Current Liabilities                  ________
Long-term & Other Liabilities  ________
Preferred Stock (if any)              ________
Common Equity          ________

CAPITAL STRUCTURE PIE CHART, Year-end FY 2012

COMMENTS: Comment on the company’s capital structure.

PART 3, RATIO ANALYSIS:

(1) LIQUIDITY:
FY 2011          FY 2012
Current Ratio:

McDonalds        ____        ____
Wendy’s        ____        ____

Quick Ratio:

McDonalds        ____        ____
Wendy’s        ____        ____

Comments On McDonalds Liquidity:

Be sure to include comments!  The numbers are meaningless by themselves.  Comment
on what you see.  What story do the numbers tell?

(2) ASSET MANAGEMENT
FY 2011          FY 2012
Total Asset Turnover:

McDonalds        ____        ____
Wendy’s         ____                ____

Average Collection Period:

McDonalds        ____        ____
Wendy’s         ____                ____

Comments On McDonalds Asset Management:

(3) DEBT MANAGEMENT:
FY 2011          FY 2012
Total Debt to Total Assets:

McDonalds         ____        ____
Wendy’s        ____        ____

Times Interest Earned:

McDonalds        ____        ____
Wendy’s        ____        ____

Comments On McDonalds Debt Management:

(4) PROFITABILITY:
FY 2011          FY 2012
Net profit Margin:

McDonalds        ____        ____
Wendy’s        ____        ____

Return on Assets:

McDonalds        ____        ____
Wendy’s        ____        ____

Return on Equity:

McDonalds        ____        ____
Wendy’s ____        ____

Modified Du Pont Equation, FY 2012:

McDonalds    Wendy’s
Net Profit Margin        ____        ____
Total Asset Turnover        ____        ____
Equity Multiplier        ____        ____

Comments On McDonalds Profitability:

(5) MARKET VALUE RATIOS:
FY 2011          FY 2012
PE Ratio:

McDonalds        ____        ____
Wendy’s        ____        ____

Market to Book Ratio:

McDonalds        ____        ____
Wendy’s        ____        ____

Comments On McDonalds Market Value Ratios:

PART 4, CONCLUSIONS AND RECOMMENDATIONS

Summarize your analysis.  Review your comments in the financial analysis section and provide your assessment of the overall status of the firm.  Include any recommendations you think are appropriate.

List any other recommendations you have for the firm in view of your analysis.

ecap
At this point in the course you have completed the first three phases of your Financial Analysis of McDonald’s Corporation, which are the Company Overview, the Financial Overview, and the Financial Ratio Analysis. The Company Overview allowed you to become familiar with the company, its history, main products and services, and so on, the Financial Overview gave you a basic look at the company’s financial status as revealed by its financial statements, and the ratio analysis allowed you to take a more in-depth look at the company’s financial status in terms of its liquidity, asset management, debt management, profitability, and market value ratios. This completes the research phases of your report. Now it is time to review your results, summarize your findings, and draw conclusions about the financial status and outlook for the company.

Schedule
Your have two weeks to complete the Summary and Conclusion section and to finalize your report. Submit the final version of your complete report at the end of Week 8 in the course along with your regular week 8 homework assignment.

Outline
Use this outline for the Summary and Conclusions portion of your report:

Summarize your analysis. Review your comments in the financial analysis section and provide your assessment of the overall status of the firm. Include any recommendations you think are appropriate.
List any other recommendations you have for the firm in view of your analysis
Format
Use the Case Study Complete Outline for your report.

Your financial analysis report of McDonald’s Corporation is now complete

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