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    Analyze Financial Statements and Assess Performance

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    Analyze the financial statements and assess whether the financial performance has improved or declined year-over-year.

    Analysis techniques include the following:
    â?¢ comparative financial statements
    â?¢ trend analysis
    â?¢ ratio analysis
    â?¢ percentage analysis

    How does McDonald's handle: Liquidity, Solvency, Profitability, and Management Efficiency such as inventory, assets etc.
    Provide an analysis of the performance of the firm based on the analysis tools used
    Provide 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.

    Data attached:

    McDonalds Corporation input your answers in the grey cells
    Consolidated Income Statement
    Fiscal Year Ended
    Years ended December 31, 2010 % change 2009 % change 2008 % change

    Sales by Company-operated restaurants $16,233.3 $15,458.5 $16,560.9
    Revenues from franchised restaurants $7,841.3 $7,286.2 $6,961.5
    Total revenues $24,074.6 100.00% $22,744.7 100.00% $23,522.4 100.00%
    OPERATING COSTS AND EXPENSES
    Company-operated restaurant expenses
    Food & paper $5,300.1 22.02% $5,178.0 22.77% $5,586.1 23.75%
    Payroll & employee benefits $4,121.4 17.12% $3,965.6 17.44% $4,300.1 18.28%
    Occupancy & other operating expenses $3,638.0 $3,507.6 $3,766.7
    Franchised restaurants-occupancy expenses $1,377.8 $1,301.7 $1,230.3
    Selling, general & administrative expenses $2,333.3 $2,234.2 $2,355.5
    Impairment and other charges (credits), net $29.1 $(61.1) $6.0
    Other operating (income) expense, net $(198.2) $(222.3) $(165.2)
    Total operating costs and expenses $16,601.5 $15,903.7 $17,079.5
    Operating income $7,473.1 $6,841.0 $6,442.9
    Interest expense-net of capitalized interest of $12.0, $11.7 and $12.3 $450.9 $473.2 522.6
    Nonoperating (income) expense, net $21.9 $(24.3) -77.6
    Gain on sale of investment $- $(94.9) -160.1
    Income before provision for income taxes $7,000.3 $6,487.0 6,158.00
    Provision for income taxes $2,054.0 $1,936.0 1,844.80
    Net income $4,946.3 $4,551.0 4,313.20

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    https://brainmass.com/business/financial-statements/analyze-financial-statements-and-assess-performance-402053

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    Solution Summary

    This solution illustrates how to perform vertical and horizontal analyses on a company's financial statements, and how to compute selected ratios, in order to determine whether its finance condition has improved or deteriorated.

    $2.19

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