...Financial Analysis of the McDonald’s Corporation MCD, NYSE (New York Stock Exchange) One McDonald's Plaza, Oak Brook, IL 60523 Map +1-630-6233000 (Phone) +1-630-6235700 (Fax) Abstract McDonald’s is the most famous and well-known fast-food company in the world. This case study examines McDonald’s from a financial standpoint. This case study will be broken down in three parts. Discussed first will be a full description of McDonald’s corporation, including its background, followed by a financial overview with comments for each financial category reviewed, the a comparison of financial ratio’s between McDonald’s and it rival Burger King derived from their 2009 and 2009 annual reports. Finally a support will be provided based off of all findings. Part One: Company Description The McDonald’s Corporation is a well-known restaurant chain that franchises and operates fast food restaurants worldwide. Reuters (2011) states that each restaurant is operated either by the Company or by franchisees. This includes conventional franchisees under franchise arrangements, and foreign affiliated markets and developmental licensees under license agreements. The company’s mission is to be our customers' favorite place and way to eat (McDonald’s, 2011). Company history McDonald’s history originates in 1940, when it started out as McDonald’s Bar-B-Que by Dic and Mac McDonald. In 1948 McDonald’s was officially founded serving only nine items, which included a 15-cent hamburger...
Words: 2116 - Pages: 9
...True/False Questions 1. A Comprehensive Annual Financial Report (CAFR) would include an introductory section, management's discussion and analysis, basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, narrative explanations, and statistical section. Answer: True 2. The three major sections of a CAFR are the Introductory, Financial, and Statistical sections. Answer: True 3. The introductory and statistical sections of a CAFR are required to be audited. Answer: False 4. State and local governments are not required to prepare a CAFR. Answer: True 5. Combining statements are required whenever a non-major column is used in one of the fund financial statements. Answer: True 6. A complete CAFR includes combining financial statements to reflect major funds. Answer: True 7. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds. Answer: True 8. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental funds only. Answer: False 9. The General Fund is not always considered to be a major fund when preparing fund basis financial statements. Answer: False 10. With respect to fund basis financial statements, governmental funds are considered to be a...
Words: 8043 - Pages: 33
...Financial Theories Overview Edward E. Edgar University of Phoenix Financial Theories Overview The following is an overview of 10 different financial theories prevalent today. The overview will include a brief description of the theory, an example of the theory, and other attributes of the theory. There will also be a conclusion to sum up a general understanding of the theories and their applications. Efficiency theory Efficiency theory has been around since the 60s and, is an extension of the efficiency theory of a capitalist society. Generally the theory is that scant resources are distributed by the owner in an efficient manner. The owner choses the best outcome for his or her investment and regulates resources and products accordingly. This is extended to the stock market in the 60s and has been a prevalent theory since. The theory as applied to the stock market says that all information of the market is fully reflected in the price of the stock and efficiently assimilated (Fama, 1970). Examples Generally stock returns are compared to overall market returns. A mutual fund company will compare their returns to the general stock market return and state they are a certain percentage above or below the market standard returns. Most will try to say they have beaten the market average. This is true for most investing firms and, is used as a selling point for the company or mutual fund. Attributes If this theory was to be taken to the extreme one would have to say that...
Words: 2830 - Pages: 12
...CHAPTER 1 AN OVERVIEW OF FINANCIAL MANAGEMENT (Difficulty: E = Easy, M = Medium, and T = Tough) Multiple Choice: Conceptual Easy: Firm organization Answer: c Diff: E [i]. Which of the following statements is true? a. One of the benefits of incorporating your business is that you become entitled to receive unlimited liability. b. Sole proprietorships are subject to more regulations than corporations. c. Sole proprietorships do not have to pay corporate tax. d. All of the statements above are correct. e. None of the statements above is correct. Firm organization Answer: c Diff: E [ii]. Which of the following statements is most correct? a. One of the advantages of the corporate form of organization is that there is no double taxation. b. The partnership form of organization has easy transferability of ownership. c. One of the disadvantages of the sole proprietorship form of organi-zation is that there is unlimited liability. d. Statements b and c are correct. e. None of the statements above is correct. Firm organization Answer: a Diff: E [iii]. Which of the following statements is most correct? a. One advantage of forming a corporation is that you have limited liability. b. Corporations face fewer regulations than sole proprietorships. c. One disadvantage of being a sole proprietor is that you have to pay corporate taxes, even though you don’t realize...
Words: 4360 - Pages: 18
...Financial Statements Dave Hall ACC/290 Lisa Henderson September 16, 2013 Financial Statements In any business, the financial statements are the backbone of the financial accounting reporting within the business. The four financial statements include the income statement, balance sheet, retained earnings statement and the statement of cash flows (Kimmel, Weygandt & Kieso, 2010). These four statements provide a summary picture of the overall financial health of the company, for the period of time reported, to both internal (managers and employees) and external customers (investors and creditors). The internal and external customers can use the company’s reported financial information to make informed decisions such as investing in the company and loaning funds or providing credit to the company. Income Statement The income statement, also referred to as the profit and loss (P&L) statement, reflects how much money a business has made over a period of time (D&B, 2013). The time period reflected may be monthly, quarterly, semi-annually or annually, and is stated as such in the header of the income statement. The data within the income statement includes revenues (from the sale of the company’s products) and expenses (salaries, rent, depreciation, supplies, etc…). To calculate net income for the time period, expenses are subtracted from revenues, thus totaling net income. The income statement is very important to both internal customers (managers and employees)...
Words: 1026 - Pages: 5
...An Overview of The Asian Financial Crisis Prepared for Mahrufa Bashar Assistant Professor Course Instructor: International Finance Prepared by S.M. Ishtiuaque (ZR 30) Md. Sakib Khaled (ZR 55) Md. Mahmudur Rahman (ZR 82) Mazharul Islam Bin Towhid (ZR 89) Debojit Saha (ZR 110) BBA 18th batch Institute of Business Administration, University of Dhaka October 02, 2013 Contents 1. Introduction 2 2. Background of the Asian Financial Crisis 2 3. Development of the Crisis 3 4. Reasons Behind the Crisis 4 5. Solutions to Problem 5 6. Conclusion 6 ------------------------------------------------- 1. Introduction In 1993 the Worldbank, celebrating the outstanding performance of eight Asian economies, coined the term ‘The Asian Miracle’. Less than five years later, four of these economies (Indonesia, Malaysia, Korea, and Thailand) and the Philippines found themselves in one of the sharpest economic crises of the last decades. The resulting economic recession shocked the world with its staggering economic and social costs. Over a million people in Thailand and approximately 21 million in Indonesia found themselves impoverished in just a few weeks, as personal savings and assets were devalued to a fraction of their pre-crisis worth. As firms went bankrupt and layoffs ensued, millions lost their jobs. Soaring inflation raised the cost of basic necessities. Strapped fiscal budgets imposed a financial squeeze on social programs, and the absence of adequate...
Words: 1775 - Pages: 8
...Goals of the MNC • Maximize shareholder wealth – Problems encountered in meeting goals: 1) Agency problems larger for MNCs than purely domestic firms because: a) monitoring more difficult because of geographic distance b) different cultures c) MNC size d) subsidiary managers may maximize the value of their subsidiary but not of the MNC as a whole 2) Centralized vs. decentralized management a) centralized reduces agency costs because it gives parent more control; downside is that local managers may be better informed b) decentralized management increases agency costs but may result in better decisions c) Internet may facilitate monitoring of foreign subsidiaries 3) Corporate control used to reduce agency problems a) executive compensation with stock b) threat of hostile takeover c) monitoring by large shareholders – Constraints encountered in meeting goals 1) Environmental - other countries may be tougher (e.g., pollution controls) 2) Regulatory - e.g., currency convertibility, remittance of profits, etc. 3) Ethical - e.g., bribes may be more acceptable in other countries Theories of International Business • Theory of Comparative Advantage – countries specialize in the production of goods they can produce with relative efficiency and trade for other products • Imperfect Markets Theory – factors of production (labor and other resources) are immobile. • Firms can capitalize on imperfect markets by...
Words: 553 - Pages: 3
...The company I decided to research is Chuck E. Cheese, which is also called CEC Entertainment Inc. Chuck E. Cheese is company and franchise owned. I have decided to collect my information from the 2010 annual report from the website. All parts of the company have been consolidated into this report including the franchise portion of the company. When evaluating the annual report the key components of my research were cash and cash equivalents, receivables, and inventories compared to the previous year. CEC Entertainment Inc. notes to the financial statements regarding cash and cash equivalents stated “cash and cash equivalents are comprised of demand deposits with banks and short-term cash investments with remaining maturities of three months or less from the date of purchase by us.” The previous statement is the only statement that is given in relation to cash and cash equivalents. After comparing the cash and cash equivalents to the previous years the amount of cash has increased by at least 2000. Like cash the amount of receivables has also increased from the previous years. In 2010 the amount of receivables was 32,327 and in 2009 the amount was 27,031. The following categories of accounts receivable in CEC Entertainment Inc. are trade receivables, vendor rebates, income taxes receivable and other accounts receivable. The highest amounts of receivables disclosed in the notes are income tax receivables with an amount of 15,320 in 2010. The lowest amount of receivables...
Words: 471 - Pages: 2
...Chapter 1 An Overview of Corporate Finance and The Financial Environment MINI CASE Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. Dellatorre is also very bright, and, therefore, she would like to understand, in general terms, what will happen to her money. Your boss has developed the following set of questions which you must ask and answer to explain the U.S. financial system to Dellatorre. a. Why is corporate finance important to all managers? Answer: Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company, and devise strategies for acquiring those funds. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. Answer: The three main forms of business organization are (1) sole proprietorships, (2) partnerships, and (3) corporations. In...
Words: 3524 - Pages: 15
...ACC201 Module 1 - Case Financial Statements Assignment Overview Click Link Below To Buy: http://hwcampus.com/shop/acc201-module-1-case/ There are three main parts to this case that require you to prepare and submit a 3- to 5-page paper. Please make sure this paper is well organized and covers all of the items below. Part I Search the course background information, the Internet and/or the Cyber Library. Discuss the terms listed below. Your discussion should expand on the definition as given in the module background. Explain why these concepts are important to financial statements. •Generally Accepted Accounting Principles (US GAAP); •International Accounting Standards (IFRS); •Securities and Exchange Commission (SEC); •Annual report; and •10-K, 10-Q, and 8-K Part II Explain the basic formats of financial statements such as income statement, balance sheet, statement of cash flows, and statement for retained earnings. Part III 1.Everything in Accounting typically falls into one of three categories, as illustrated by the Accounting Equation. State the Accounting Equation: Assets = _______________ + _______________ 2.You will note that the Accounting Equation comprises 3 "categories," each of which can be broken down further into accounts. For each of the three main categories of the Accounting Equation, list 5 or more accounts with actual amounts that would typically be classified into each. For instance, Land & Equipment would typically be categorized...
Words: 427 - Pages: 2
...Chapter 1 An Overview of Financial Management ANSWERS TO END-OF-CHAPTER QUESTIONS 1-1 a. A proprietorship, or sole proprietorship, is a business owned by one individual. A partnership exists when two or more persons associate to conduct a business. I contrast, a corporation is a legal entity n created by a state. The corporation is separate and distinct from its owners and managers. b. In a limited partnership, limited partners’ liabilities, investment returns and control are limited, while general partners have unlimited liability and control. A limited liability partnership (LLP), sometimes called a limited liability company (LLC), combines the limited liability advantage of a corporation with the tax advantages of a partnership. A professional corporation (PC), known in some states as a professional association (PA), has most of the benefits of incorporation but the participants are not relieved of professional (malpractice) liability. c. Stockholder wealth maximization is the appropriate goal for management decisions. The risk and timing associated with expected earnings per share and cash flows are considered in order to maximize the price of the firm’s common stock. d. Social responsibility is the concept that businesses should be partly responsible for, and thus bear the costs of, the welfare of society at large. Business ethics can be thought of as a company’s attitude and conduct toward its employees, customers, community, and stockholders. A firm’s commitment...
Words: 2050 - Pages: 9
...Integration of financial services in banking The financial world is changing rapidly. With increasing globalization, the blurring of distinctions, market regulation and the growth of internet enabled services, the banking sector is increasingly competitive. In the present times where banks are grappling with their declining bottom line and rise in NPAs, Innovation has become imperative for them. Product quality and price are rapidly becoming less distinctive in the battle for customers. Financial industry is at the cusp of the shift in financial sector and financial flows between banks, insurers and pension funds. The answer for the banks to these developments lies in the integration of all the financial services provided by the banks by becoming more customer-oriented. The integration of all financial services should be with the customer as the central starting point after understanding the overall financial status of a customer and providing a tailored advice for the customers. To make this possible, products, agreements, conditions and settlements are integrated into a logical and easy fashion for the customer. This can be achieved by the addition of a service layer. This service layer will assemble the separate services like banking, investment, mortgage and insurance into an integrated financial service. Following context diagram indicates the design: Advisor Client Total Agreement Service Desk Monitoring Customer Aggrements Mortgage Insurance Investment Saving/loan ...
Words: 1506 - Pages: 7
...Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones) Chapter 2 Financial Institutions, Financial Intermediaries, and Asset Management Firms Multiple Choice Questions 1 Financial Institutions 1) Financial enterprises, more popularly referred to as financial institutions, provide a variety of services. Which of the below is NOT one of these? A) Transform financial assets acquired through the market and constituting them into a different, and more widely preferable, type of asset–which becomes their liability. B) Exchange financial assets on behalf of customers but not for their own accounts. C) Manage the portfolios of other market participants. D) Assist in the creation of financial assets for their customers, and then sell those financial assets to other market participants. Answer: B Comment: Financial enterprises exchange financial assets both on behalf of customers and for their own accounts. Diff: 2 Topic: 2.1 Financial Institutions Objective: 2.1 the business of financial institutions 2) Financial intermediaries include ________ that acquire the bulk of their funds by offering their liabilities to the public mostly in the form of deposits; insurance companies, pension funds, and finance companies. A) depository institutions B) utilities C) initial public offerings D) preferred equity instrument. Answer: A Diff: 1 Topic: 2.1 Financial Institutions Objective: 2.1 the business of financial institutions 3)...
Words: 5099 - Pages: 21
...ENTERTAINMENT, FINANCIAL SERVICES | | SBI Superstars present a production of Group 2’s analysis on the specified industries. | | Tajuan K. Griffin – ChairMarcus Bourgeois – Co-ChairArica McCullumMichael LatsonRicardo CopelandDavid BercklerAyokunle Ojutalayo Ifeanyi Korie Karen JohnsonRobensky Theodore | 7/21/2010 | | ------------------------------------------------- Table of Contents Table of Contents………………………………………...…………………………………….pg 2 Project Overview………………………………………………………………………………pg 4 Computer Industry pg 5 Hardware Overview………………………………………........................................................pg 6 Hardware Top 5 Financials…………………………………………………………………….pg 7 Hardware Top 5 Analysis………………………………………………………………...........pg 8 Software Overview...................................................................................................................pg 12 Software Top 5 Financials……………………………………………………………………pg 13 Software Top 5 Analysis……………………………………………………………………...pg 14 Computer Industry Outlook…………………………………………………………………..pg 15 Consumer Goods Industry pg 16 Consumer Goods Overview......................................................................................................pg 16 Consumer Goods Top 5 Financials…………………………………………………………...
Words: 4971 - Pages: 20
...True False 4. The NYSE is an example of a secondary market. True False 5. Privately placed securities are usually sold to one or more investment bankers and then resold to the general public. True False 6. Money markets are the markets for securities with an original maturity of 1 year or less. True False 7. Financial intermediaries such as banks typically have assets that are riskier than their liabilities. True False 8. There are three types of major financial markets today: primary, secondary, and derivatives markets. The NYSE and NASDAQ are both examples of derivatives markets. True False Multiple Choice Questions 9. What factors are encouraging financial institutions to offer overlapping financial services such as banking, investment banking, brokerage, etc.? I. Regulatory changes allowing institutions to offer more services II. Technological improvements reducing the cost of providing financial services III. Increasing competition from full service global financial institutions IV. Reduction in the need to manage risk at financial institutions A. I only B. II and III only C. I, II, and III only D. I, II, and IV only E. I, II, III, and IV Figure 1-1 IBM creates and sells additional stock to the investment banker, Morgan Stanley. Morgan Stanley then resells the issue to the U.S. public. 10. This transaction...
Words: 6308 - Pages: 26
