Mc Donald’s
1.
2.
3.
4.
Le Thi Thuy Linh
Tu Ngoc Hinh
Pham Thanh An
Nguyen Thi My Hang
Group 3
Content
Introduction
Common size
Ratios analysis
Conclusion
Recomendation
Introduction
1. History
Name
McDonald's Corporation
Industries served
Restaurants, Food
Geographic areas served
Worldwide
Headquarters
U.S.
Current CEO
Don Thompson
Revenue
$ 27.56 billion (2012)
Profit
$ 5.46 billion (2012)
Employees
1,800,000 (2013)
McDonald’s is the world’s leading fast food restaurant chain with
more than 34,000 local restaurants serving approximately 69 million
people in 119 countries each day.
Introduction
2. Product of Mc Donald’s
 Burger
Delicious, freshly made, and oh-sosatisfying. From the Big Mac to our
Premium Grilled Chicken Club to our
classic Cheeseburger, McDonald’s
sandwiches make the meal
 Chicken, fish and pork
From our ever-popular Chicken
McNuggets, our fabulously fresh
salads or the classic Filet-O-Fish,
both chicken and fish from
McDonald’s are delicious choices.
Introduction
 Breakfast
From wholesome choices like Fruit & Maple
Oatmeal and the Egg White Delight McMuffin to
the savory Sausage Biscuit to the sweet
McGriddles sandwich
 Beverages
No meal is complete without a drink! From
Diet Coke to low-fat milk to fresh-brewed hot
coffee
 Desserts and Shakes
The McFlurry is a soft-serve ice cream
dessert, that has pieces of candy or cookies
mixed into it
Introduction
3. Mc Donald’s in Viet Nam
• In 10/02/2014, McDonald's
Corporation opened the first
restaurant in Vietnam.
• Strategically located at the busy
roundabout at intersection of
Dien Bien Phu and Nguyen Binh
Khiem Streets in District 1.
• McDonald's 350-seat restaurant.
• With a total floor area more than 1,300 square meters on a property close
to 3,000 square meters, the restaurant is designed as a modern dining
destination
Introduction
4. Competitors
Competition for McDonald’s is mainly
due to demand and choices, prices, and
nutrition values. Demand and choices
play roles in competition because fast
food companies have to create a wide
variety menu to satisfy all customers. If
one restaurant has more variety and
innovation on the menu, consumers are
more likely to go to that restaurant.
We choose the Burger King is the main
competitor of McDonald’s that we can
compare them together. The reason why
we choose it because same as McDonald,
Burger King also had a longer history, it
appeared in 1954 and now it has about
11 million customers over the world
Introduction
5. Analysis SWOT
 S-O Strategies
 Focus on plan to win
to attract customers
and expansion in
other countries
 Expansion in market
share by more
investments in Asia
 Minimize customers
losses by provide
low cost menu and
discounts
 W-T Strategies
 S-T
Strategies
SWOT
 More control on
franchise dealers to
maintain McDonald’s
reputation and quality.
 Provide new product
and keep innovation
 Not use Trans fat in all
worldwide McDonald's
 Replace the production
components cans into
an environment –
friendly material
 W-T Strategies
Common size
Income Statement
(%)
2011
2012
2013
MD
BK
MD
BK
MD
BK
Sales
100
100
100
100
100
100
COGS
60.43
60.68
60.76
53.29
61.21
19.58
Gross profit
51.24
20.33
51.09
29.74
51.71
61.82
EBIT
31.58
21.34
31.21
26.96
31.18
51.28
Interest
expense
1.82
9.69
1.87
11.36
1.86
17.45
EBT
31.58
11.65
31.21
15.61
31.18
33.83
Net Income
20.38
3.77
19.82
5.97
19.87
20.39
Common size
Balance sheet
(%)
2011
2012
2013
MD
BK
MD
BK
MD
BK
Cash
7.08
8.22
6.60
9.83
7.64
13.50
Account receivable
4.05
2.74
3.89
3.22
3.60
3.08
Inventory
0.35
0.25
0.34
0.12
0.34
0.02
Current asset
13.35
12.94
13.91
16.00
13.79
18.43
Non-current asset
17.44
1.99
16.35
3.19
15.91
6.24
Total asset
100
100
100
100
100
100
Account payable
2.91
1.76
3.23
1.23
2.97
0.53
Current liabilities
10.64
8.44
9.62
7.15
8.65
5.94
Equity
43.62
25.96
43.22
21.12
43.71
26.01
Total Liabilities &
equity
100
100
100
100
100
100
Common size
Cash flow
(%)
Consolidated Statement of Cash flow
Year
2011
2012
2013
Cash provided by operation
7150.1
6966.1
7120.7
Cash used for investing activities
(2570.9)
(3167.3)
(2673.8)
Cash used for financing activities
(4533.0)
(3849.8)
(4043.0)
Ratios analysis
Our group focused to analyze 4 ratios to understand all
McDonald’s financial situation
01. Activity Ratios
- Short-term activity ratios
- Long-term activity ratios
03. Long-term debt and solvency ratios
- Debt to total capital
- Debt to equity
- Time interest earned
- Financial leverage
02. Liquidity ratios
- Current ratio
- Quick ratio
- Cash from operation ratio
- Description of the contents
04. Profitability ratios
- Net profit margin
- Gross profit margin
- ROS
- ROA
- ROE
Activity ratios
Activity ratios
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
Activity ratios
Short-term activity ratios
Inventory turnover
140.2038
140.4671
143.9735
DOH
2.5677
2.5629
2.5005
Receivables turnover
20.8569
20.3446
21.4862
DOS
17.2605
17.6951
16.7549
Working capital turnover
16.5371
22.8506
23.1057
Payable turnover
25.2307
26.2143
28.3498
Number of day of payables
14.2683
13.7329
12.6985
Total asset turnover
0.7806
0.8063
0.8314
Fixed asset turnover
1.1148
1.1604
1.2031
Long-term activity ratios
Activity ratios (cont.)
1. Short-term activity ratios
1.1 The inventory turnover ratios
Because of McDonald’s is the merchandise company so most of inventories of company
only focus on finished goods.
The inventory turnover ratio =
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑 𝑠𝑜𝑙𝑑
17,203
=
= 140.2038
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 (123.7 + 121.7)/2
Inventory Turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
140.2038
140.4671
143.9735
Burger King
57.0127
102.9412
97.5945
Data of Inventory of McDonald’s from 2010 to 2013
Year
2010
2011
2012
2013
Inventories (million)
109.9
116.8
121.7
123.7
113.35
119.25
122.7
Average Inventories
Activity ratios (cont.)
160
143.9735
140.4671
140.2038
140
120
100
97.5945
80
102.9412
57.0127
60
40
20
0
Dec, 2011
Dec, 2012
Dec,2013
McDonald's
Burger King
Activity ratios (cont.)
1. Short-term activity ratios
1.2. Average number of day inventory in stock
Average number of day inventory in stock =
360
360
=
= 2.5677
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 140.2038
Days of inventory on hand, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
2.5677
2.5629
2.5005
Burger King
3.2488
2.6516
2.8289
4
3
2
2.8289
2.5005
2.6516
3.2488
2.5629
2.5677
Dec, 2012
Dec,2013
1
0
Dec, 2011
McDonald's
Burger King
Activity ratios (cont.)
1. Short-term activity ratios
1.3. The receivable turnover
𝑆𝑎𝑙𝑒𝑠
28,105.7
The receivable turnover =
=
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 (1,319.8 + 1,375.3)/2
Receivables Turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
20.8569
20.3446
21.4862
Burger King
6.3914
11.8800
15.2785
Data of Receivable of McDonald’s from 2010 to 2013
Year
2010
Account receivable
1,179.1
(million)
Average account receivable
2011
2012
1,334.7
1,375.3
1256.9
1355
Activity ratios (cont.)
25
21.4862
20.8569
20.3446
20
15.2785
15
McDonald's
Burger King
11.88
10
6.3914
5
0
Dec, 2011
Dec, 2012
Dec,2013
Activity ratios (cont.)
1. Short-term activity ratios
1.4. Average number of day receivable outstanding
Average number of day receivable outstanding =
360
360
=
= 17.2605
The receivable turnover 20.8569
DOS (Days of sales outstanding), comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
17.2605
17.6951
16.7549
Burger King
56.3256
30.3029
23.5625
McDonald's
Burger King
60
40
20
0
Dec, 2011
Dec, 2012
Dec,2013
Activity ratios (cont.)
1. Short-term activity ratios
1.5. Working capital turnover
Working capital turnover =
𝑆𝑎𝑙𝑒𝑠
28,105.7
=
= 16.5371
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 (1880.1 + 1519)/2
Working capital turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
16.5371
22.8506
23.1057
Burger King
1.8775
5.2988
13.3442
Year
Current assets
Current Liabilities
Net working capital
2011
4,403.0
3,509.2
893.8
2012
4,922.1
3,403.1
1519.0
2013
5,050.1
3,170.0
1880.1
Activity ratios (cont.)
25
23.1057
22.8506
20
15
16.5371
13.3442
McDonald's
Burger King
10
5.2988
5
1.8775
0
Dec, 2011
Dec, 2012
Dec,2013
Activity ratios (cont.)
1. Short-term activity ratios
1.6. Payable turnover
Inventories
Begin Inventories
Purchases
COGS
Ending Inventories
Year
Begin
Inventories
So: Purchase = Ending inventories + COGS
– Begin Inventories
COGS
Ending
Inventories
Purchase
2011
109.9
16,319.4
116.8
16,326.3
2012
116.8
16,750.7
121.7
16,755.6
2013
121.7
17,203.0
123.7
17,205
Data of Account Payable of McDonald’s from 2010 to 2013
Year
2010
2011
2012
Account payable (million)
943.9
961.3
1,141.9
952.6
1051.6
Average account payable
Activity ratios (cont.)
𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒
17,205
Payable turnover =
=
= 15.445
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑎𝑐𝑐𝑜𝑢𝑛𝑡 𝑝𝑎𝑦𝑎𝑏𝑙𝑒𝑠 (1,086 + 1,141.9)/2
Payables Turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
15.445
15.9334
17.1384
Burger King
4.6232
12.6511
13.8499
20
15
17.1384
13.8499
15.9334
15.445
12.6511
10
4.6232
5
0
2011
2012
2013
McDonald's
Burger King
Activity ratios (cont.)
1. Short-term activity ratios
1.7. Number of days of payable
Number of days of payable =
360
360
=
= 14.2683
𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 25.2307
𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐝𝐚𝐲𝐬 𝐨𝐟 𝐩𝐚𝐲𝐚𝐛𝐥𝐞, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
23.3085
23.5940
21.0055
Burger King
77.8681
28.4560
25.9929
77.8681
80
60
40
23.594
21.0055
28.456
23.594
23.3085
Dec, 2011
Dec, 2012
Dec,2013
20
0
McDonald's
Burger King
Activity ratios (cont.)
2. Long-term activity ratios
2.1. Asset turnover
According to Income statement of McDonald’s, our group finds out that most of
total asset of McDonald’s also come from Net property plant and equipment
Total asset turnovers =
𝑆𝑎𝑙𝑒
28,105.7
=
= 0.7806
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 (36,626.3 + 35,386.5)/2
Total Asset Turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
0.7806
0.8063
0.8314
Burger King
0.2012
0.3536
0.4154
Activity ratios (cont.)
0.9
0.8
0.7806
0.8063
0.8314
0.7
0.6
0.5
0.4154
0.4
McDonald's
Burger King
0.3536
0.3
0.2012
0.2
0.1
0
Dec, 2011
Dec, 2012
Dec,2013
Activity ratios (cont.)
2. Long-term activity ratios
2.2. Fixed asset turnover
Fixed asset turnover =
𝑆𝑎𝑙𝑒
28,105.7
=
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑛𝑒𝑡 𝑓𝑖𝑥𝑒𝑑 𝑎𝑠𝑠𝑒𝑡𝑠 (25,747.3 + 24,677.2)/2
= 1.1148
Fixed Asset Turnover, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
1.1148
1.1604
1.2031
Burger King
1.3592
2.0619
2.1897
Activity ratios (cont.)
2.5
2.1897
2.0619
2
1.5
1.3592
1.1827
1.1171
1.0916
Dec, 2011
Dec, 2012
Dec,2013
1
0.5
0
McDonald's
Burger King
Liquidity ratios
Liquidity analysis
Dec 31, 2013
Dec 31, 2012 Dec 31, 2011
Liquidity analysis
Current ratio
1.593
1.446
1.255
Quick ratio
1.554
1.411
1.221
Cash ratio
0.8829
0.6865
0.6656
%Inventory/CA
2.45%
2.47%
2.65%
Cash flow from operation ratio
2.239
2.057
2.052
Liquidity ratios (cont.)
1. Current ratio
Current ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
5,050.1
=
= 1.593
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
3,170
Current Ratio, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
1.593
1.446
1.255
Burger King
3.1052
2.2386
1.5328
Liquidity ratios(cont.)
3.5
3.1052
3
2.2386
2.5
2
1.5
1.5328
1.255
1.446
1.593
1
0.5
0
Dec, 2011
Dec, 2012
Dec,2013
McDonald's
Burger King
Liquidity ratios (cont.)
2. Quick ratio
Quick ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑖𝑒𝑠 5,050.1 − 123.7
=
= 1.554
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
3,170
Quick Ratio, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
1.554
1.411
1.221
Burger King
3.1017
2.2217
1.5037
Liquidity ratios(cont.)
3.5
3
2.5
2
McDonald's
Burger King
1.5
1
0.5
0
Dec, 2011
Dec, 2012
Dec,2013
Liquidity ratios (cont.)
3. Cash ratio
𝐶𝑎𝑠ℎ 𝑟𝑎𝑡𝑖𝑜 =
𝐶𝑎𝑠ℎ + 𝑀𝑎𝑟𝑘𝑒𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 2,798.7
=
= 0.8829
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
3,170.0
Cash flow from operation ratio, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
0.8829
0.6865
0.6656
Burger King
0.9731
1.3743
2.2743
Liquidity ratios(cont.)
2.5
2.2743
2
1.3743
1.5
1
0.6656
0.6865
2011
2012
0.9371
0.8829
0.5
0
2013
McDonald's
Burger King
Liquidity ratios (cont.)
4. Cash from operation ratio
Cash from operation ratio =
Cash flow from operation 7,100
=
= 2.239
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
3,170
Cash flow from operation ratio, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
2.239
2.057
2.052
Burger King
0.9399
0.5641
0.8615
Liquidity ratios(cont.)
2.5
2
1.5
McDonald's
Burger King
1
0.5
0
Dec, 2011
Dec, 2012
Dec,2013
Long-term debt and solvency ratio
Long-term debt and solvency analysis
Dec 31, 2013
Dec 31, 2012 Dec 31, 2011
Long-term debt and solvency analysis
Capitalization table and debt ratio
Debt to total capital
1.122
1.116
1.285
Debt to equity
0.198
0.223
0.244
Times interest earned
0.4531
0.4538
0.4617
Financial leverage
2.2878
2.3138
2.2925
Interest coverage ratios
Long-term debt and solvency ratio (cont.)
1. Debt to total capital
Debt to total capital =
𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
14,129,800
=
= 0.47
𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 30,139,500
Debt to capital, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
0.47
0.47
0.46
Burger King
169.1098
62.5214
50.3569
Long-term debt and solvency ratio (cont.)
169.1098
180
160
140
120
McDonald's
Burger King
100
80
60
50.3569
62.5214
40
20
1.285
1.116
1.122
0
Dec, 2011
Dec, 2012
Dec,2013
Long-term debt and solvency ratio (cont.)
2. Debt to equity
Debt to equity =
𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
3,170
=
= 0.198
𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦 16,009.7
Debt to equity, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
0.198
0.223
0.244
Burger King
2.8441
3.7353
2.8528
Long-term debt and solvency ratio (cont.)
4
3.5
3
2.5
McDonald's
Burger King
2
1.5
1
0.5
0
Dec, 2011
Dec, 2012
Dec,2013
Long-term debt and solvency ratio (cont.)
3. Time interest earned
Time interest earned =
𝐸𝐵𝐼𝑇
8,764.3
=
= 16.72
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒 521,900
Time interest earned, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
16.72
16.64
17.26
Burger King
2.2029
2.3744
2.9390
Long-term debt and solvency ratio (cont.)
18
17.3
16.64
16.72
16
14
12
McDonald's
Burger King
10
8
6
4
2.939
2.3744
2.2029
2
0
Dec, 2011
Dec, 2012
Dec,2013
Long-term debt and solvency ratio (cont.)
4. Financial leverage
Financial leverage =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 36,626.3
=
= 2.2878
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦 16,009.7
Financial leverage, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
2.2878
2.3138
2.2925
Burger King
3.8441
4.7353
3.8528
Long-term debt and solvency ratio (cont.)
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
McDonald's
Burger King
Dec, 2011
Dec, 2012
Dec,2013
Profitability ratio
Profitability analysis
Dec 31, 2013
Dec 31, 2012 Dec 31, 2011
Profitability analysis
Net profit margin
19.89%
19.82%
20.38%
ROS
51.71%
19.89%
51.09%
19.82%
51.24%
20.38%
ROA
15.52%
1598%
1694%
ROE
35.71%
36.82%
37.92%
Gross profit margin
Profitability ratio (cont.)
1. Net profit margin
Net profit margin =
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
5,589.9
=
= 19.89%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
28,105.7
Net profit margin, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
19.89%
19.82%
20.38%
Burger King
20.39%
5.97%
3.77%
Profitability ratio (cont.)
0.25
0.2
0.15
McDonald's
Burger King
0.1
0.05
0
Dec, 2011
Dec, 2012
Dec,2013
Profitability ratio (cont.)
2. Gross profit margin
Gross profit margin =
Gross profit 14,534.7
=
= 51.71%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
28,105.7
Gross profit margin, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
51.71%
51.09%
51.24%
Burger King
61.82%
29.74%
20.33%
Profitability ratio (cont.)
0.7
0.6
0.6182
0.5124
0.5109
0.5171
0.5
0.4
0.3
McDonald's
Burger King
0.2974
0.2033
0.2
0.1
0
Dec, 2011
Dec, 2012
Dec,2013
Profitability ratio (cont.)
3. ROS
ROS =
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
5,585.9
=
= 19.89%
𝑆𝑎𝑙𝑒𝑠
28,105.7
ROS, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
19.89%
19.82%
20.38%
Burger King
20.39%
5.97%
3.77%
Profitability ratio (cont.)
0.25
0.2038
0.1982
0.2039
0.1989
0.2
0.15
McDonald's
Burger King
0.1
0.05
0.0597
0.0377
0
Dec, 2011
Dec, 2012
Dec,2013
Profitability ratio (cont.)
4. ROA
ROA =
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
5,589.9
=
= 15.52%
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 (36,626.3 + 35,386.5)/2
ROA, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
15.52%
15.98%
16.94%
Burger King
4.10%
2.11%
1.56%
Profitability ratio (cont.)
18.00%
16.94%
15.98%
16.00%
15.52%
14.00%
12.00%
McDonald's
Burger King
10.00%
8.00%
6.00%
4.00%
2.00%
0.041
0.0156
0.0211
0.00%
Dec, 2011
Dec, 2012
Dec,2013
Profitability ratio (cont.)
5. ROE
ROE =
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
5,589.9
=
= 0.3571
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
16,009.7 + 15,293.6 /2
ROE, comparison with Burger King
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
McDonald’s
35.71%
36.82%
37.92%
Burger King
17.37%
8.97%
6.09%
Profitability ratio (cont.)
40.00%
37.92%
36.82%
35.71%
35.00%
30.00%
25.00%
0.1737
20.00%
15.00%
10.00%
0.0609
0.0897
5.00%
0.00%
Dec, 2011
Dec, 2012
Dec,2013
McDonald's
Burger King
Dupont
Two-component disaggregation of ROE
ROE
Dec 31, 35.51%
2013
Dec 31, 36.97%
2012
Dec 31, 38.83%
2011
=
ROA
x
15.52%
Leverag
e
2.2878
15.98%
2.3138
16.94%
2.2925
Dupont
Three-component disaggregation of ROE
ROE
Dec 31, 35.52%
2013
Dec 31, 36.97%
2012
Dec 31, 38.84%
2011
=
Net
profit
margin
19.89%
x
Asset
turnov
er
0.7806
x
Levera
ge
2.2878
19.82%
0.8063
2.3138
20.38%
0.8314
2.2925
Recommendation
The investors should concern in investing McDonald’s
because:
 Both of their revenue and net profit were increasing
significantly with a stable growth in the future.
 Strong finance situation:
-use less debt in total asset
-both of current ratio and quick ratio also higher than 1
-The amounts of cash reserve are also high
Conclusion
 McDonald still doesn’t have competitors in fast food
factor.
 Most of ratios also are higher and equal to benchmark
and McDonald’s have been maintained their ratios
throughout from 2011 to 2013
 McDonald’s should improve their Dupont ratios