Mc Donalds

Key Performance Metrics

  • The review of Net Profit Margin witnessed a fluctuated trend. The Net Profit Margin moved from 28.20% in 2019 to 33.22% in 2023.
  • The average EBIT Margin for the period under analysis was 42.21%, with 2020 and 2023 performing the worst and best,
  • In the current year, MC DONALDS covered its interest liabilities 8.73 times – compared to 2019 when it was 8.15 times.
  • The Capital turnover stood at 0.53 times in 2023 from 0.58 in 2019, implying a low performance on Capital of the business in relation to revenue.

Profitability

  • The revenue of MC DONALDS has fluctuated year on year. The revenue decreased by 10.09% between 2019 and 2020 and a further 20.90% increase was recorded between 2020 and 2021. There also occurred an increase of 9.97% between 2022 and 2023 (the current period).
  • MC DONALDS’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.

Liquidity

  • The company’s result in liquidity looks fair, as the current ratio/acid test increased from 1.43:1/1:41 to 1.16:1/1.14:1 in the last year. Which implies that the company does not have enough assets to settle its current liabilities.

Capital Structure

  • MC DONALDS is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been negative year on year. The gearing position of the company stood at –11.28 in the current year.

Source: MC DONALDS Annual Report

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