Friday, September 27, 2019
Finance Analysis of McDonalds Essay Example | Topics and Well Written Essays - 2500 words
Finance Analysis of McDonalds - Essay Example D. Main products and services: McDonald's menu concentrates on five main ingredients: beef, chicken, bread, potatoes and milk, which account for 255 million of food expenditure. The company's main menu lists its basic food offering: the Big Mac, which still exists as a major seller; other standard product names come from the McDonald's convention of adding a 'Mc' to a particular item. So, a chicken sandwich becomes a 'McChicken' sandwich and chicken nuggets become chicken 'McNuggets'. This idea has been extended to their dessert range, with the creation of the 'McFlurry' ice cream5 (biz/ed, 1996-2008). E. Geographic area of operations: McDonald's is one of only a handful of brands that command instant recognition in virtually every country of the world. McDonald's began with one restaurant in the US in 1955 and today there are more than 26,500 restaurants in over 119 countries, serving around 39 million people every day - making McDonald's by far the largest food service company in the world6 (McDonalds). The business is managed as distinct geographic segments: United States; Europe; Asia/Pacific, Middle East and Africa (APMEA); Latin America; and Canada. In addition, throughout this report we present a segment entitled "Corporate& Other" that includes corporate activities and non-McDonald's brands (e.g., Boston Market). The U.S. and Europe segments each account for approximately 35% of total revenues. France, Germany and the United Kingdom (U.K.), collectively, account for approximately 60% of Europe's revenues; and Australia, China and Japan (a 50%-owned affiliate accounted for under the equity method), collect ively, account for nearly 50% of APMEA's revenues. These six markets along with the U.S. and Canada are referred to as "major markets"... The paper describes the company's history from the beginning. It shows the full list of the products and services and gives the financial analysis of McDonalds. McDonalds is one of the worldÃ¢â¬â¢s largest food chain and a key player in the restaurant industry. The company regards itself as the leading global food service retailer. The company has got over 30,000 restaurants all across the globe and is serving more than 47 million people in almost 121 countries each day. As part of this paper, the financial analysis of McDonalds has been carried out. The various financial aspects like the companyÃ¢â¬â¢s sales and net profit, asset and capital structure, expense distribution have been observed and analyzed for a period starting from 2001 to 2006. Each of the above discussed calculation and analysis have been supported by a graphical representation. The overall performance of the company with respect to all these various calculations was very good except that there had been a dip in the overall sales of the company in the year 2002 which was eventually made up in the very next year. Also, ratio analysis of the firm has been done from diffe rent perspectives like liquidity, profitability, asset turnover, efficiency and market valuation etc, for two consecutive years i.e. 2005 and 2006. An important and yet notable figure with respect to the market valuation of the company is its price-earnings ration which actually exceeded the industry average in the year 2006 which clearly shows the efficiency of the firm in productive utilization of its resources.