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    Ratio Analysis

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    Has the financial performance of McDonald's Corporation improved or declined year-over-year? Provide an analysis of the performance of the firm based on the analysis tools used, and a summary of the company's financial performance and assessment of whether it has improved or declined year-over-year in terms of profitability, asset utilization, and liquidity.

    Analysis techniques include the following:

    Comparative financial statements
    Trend analysis
    Ratio analysis
    Percentage analysis

    © BrainMass Inc. brainmass.com May 20, 2020, 9:31 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/ratio-analysis-mcdonalds-corporation-462080

    Solution Preview

    MC DONALDS CORPORATION
    1. RATIO ANALYSIS
    LIQUIDITY
    Current Ratio = Current Assets/Current Liabilities
    2011 = 4,403,000/3,509,200 = 1.25
    2010 = 4,368,500/2,924,700 = 1.49
    2009 = 4,368,500/2,988,700 = 1.46
    Quick Ratio = (Current Assets - Inventory)/Current Liabilities
    2011 =( 4,403,000 - 116,800)/ 3,509,200 = 1.22
    2010 = (4,368,500 - 109,900)/2,924,700 = 1.46
    2009 = (4,368,500 - 106,200)/2,988,700 = 1.43
    ACTIVITY
    RECEIVABLES TURNOVER = Net Sales/Average Receivables
    2011 = 27,006,000/[( 1,334,700 + 1,179,100)/2]
    = 27,006,000/1,256,900 = 21.49

    2010 = 24,074,600/[( 1,179,100 +1,060,400)/2]
    = 24,074,600/2239500 =10.75

    INVENTORY TURNOVER = Cost of Goods Sold/Average Inventory
    2011 = 16,319,400/[( 116,800 ...

    Solution Summary

    Comparative financial statements
    Trend analysis
    Ratio analysis
    Percentage analysis

    $2.19

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