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Analysis of Key Accounts: McDonald's & Wendy's

1. For 2011 and 2012, analyze the trends and compare revenues, cost of goods sold, accounts receivable, accounts payable, and inventory.

2. Which company shows the best performance? Explain.

3. How is the information you reviewed helpful from a managerial point of view? Explain.

4. Comment on how the income statement and the balance sheet interact.

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Solution Preview

See attached analysis in Excel of sales, costs of goods sold, AR, inventory, AP and return on assets for McDonalds and Wendy's for 2011 and 2012.

- Keeping the case analysis in mind, discuss and interpret the changes over the two-year period.

The gross margin between these two is quite different, with McDonalds being nearly double Wendys. The net income is also FORTY times as high for McDonalds as for Wendys. Return on assets is similarly in favor of McDonalds by many orders of magnitude. The balance sheet measures, however, are more similar. McDonalds has more AR and AP than Wendys as a percent of assets and they have almost identical inventory as a percent of assets. Neither company has ...

Solution Summary

Your discussion is 444 words and an excel spreadsheet analyzing profitability, inventory, AR and AP as a percent of sales or percent of assets for 2011 and 2012 for McDonalds and Wendys.