MCDONALD'S INTERNATIONAL FINANCE

McDonald's International Finance

McDonald's International Finance

Introduction

In the last few years, McDonald's has focused on the internal improvements of their existing restaurants rather than on expansion. McDonald's has also stated that rising beef costs are having an impact on their bottom line. "During this year's first quarter the cost of beef rose 6% and proceeded to rise in the second-quarter with an added 10% increase. head economic agent, Matthew H. Paull expects this increase in costs to continue with the cost of beef increasing to between 5% and 8% in 2005," (Gray, 2005).

Financial Analysis

McDonald's revenues for 2008 were $15,405.7 million with a net income of $992.1 million. In 2009 McDonald's revenues were $3,148,912 million with a net income of $1,508.2 million and in 2010 revenues were $19,064.7 million with a net income of $2,278.5 million.

The current ratio is an indication of a company's ability to meet short-term debt obligations; the higher the ratio, the more liquid the company is (Investorword.com). The industry mean is .97. present ratio is identical to present assets divided by present liabilities. If the current assets of a business are more than twice the present liabilities, then that business is usually considered to have good short-term financial strength. If present liabilities exceed present assets, then the business may have difficulties gathering its short-term obligations. In the case for McDonald's they fall below the industry average at .81

Return on Equity (ROE)

A measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but before dividends) divided by book value, expressed as a percentage. It is utilised as a general indication of the company's efficiency; in other phrases, how much earnings it is able to generate given the resources supplied by its stockholders. Investors generally gaze ...