The review of Net Profit Margin witnessed a fluctuating 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, respectively.
In the current year, MC DONALDS was able to cover 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 strong, as current ratio/acid test increased from 1.43:1/1:41 to 1.16:1/1.14:1 on the last year. Which implies that the company has 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 increasing year on year. The gearing position of the company appears to be low as it stood at a negative 11.28 in the current year.