Profitability ratios of McDonalds Company



Profitability ratios of McDonalds Company

Introduction

Calculation of profitability ratios

Asset turnover ratio (2012) = Sales/Total assets

= 27567/35386.5

= 77.90 days

Asset turnover ratio (2011) = Sales/Total assets

= 27006/32989.9

= 81.86 days

Analysis of Asset Turnover Ratio

After calculating the asset turnover ratio of McDonalds Company a slight decrease was observed from preceding year, as in 2011 the ratio was 81.86% whereas in 2012 it declines to 77.90 percent (Gitman & McDaniel, 2008). However, this slight decline is not a worrying sign for the company as company is earning considerable amount of revenue from its assets.

Profit Margin (2012) = ...