Case Study Financial Ratio Analysis

Case Study Financial Ratio Analysis

Recap
At this point in the course you have completed the first two phases of your Financial Analysis of McDonald’s Corporation, which are the Company Overview and the Financial Overview. The Company Overview allowed you to become familiar with the company, its history, main products and services, and so on, and the Financial Overview gave you a basic look at the company’s financial status as revealed by its financial statements. Now it is time to take a more in-depth look at the company’s financial status by performing a ratio analysis.

Remember from your readings that ratio analyses are relative. That is, they tell you how a company is doing compared to something else. In your ratio analysis of McDonald’s you will measure its performance compared to one of its major competitors, Wendy’s, and you will compare its performance in the latest fiscal year with its performance in the previous year.

Schedule
Your have two weeks to complete the Ratio Analysis. Submit it at the end of Week 6 in the course along with your regular week 6 homework assignment.

Outline
Use the Part 3 Financial Ratio Analysis for the financial ratio analysis of your report.

PART 3, RATIO ANALYSIS:
(1) LIQUIDITY:
FY 2011 FY 2012
Current Ratio:

McDonalds ____ ____
Wendy’s ____ ____

Quick Ratio:

McDonalds ____ ____
Wendy’s ____ ____

Comments On McDonalds Liquidity:

Be sure to include comments! The numbers are meaningless by themselves. Comment
on what you see. What story do the numbers tell?

 

 
(2) ASSET MANAGEMENT
FY 2011 FY 2012
Total Asset Turnover:

McDonalds ____ ____
Wendy’s ____ ____

Average Collection Period:

McDonalds ____ ____
Wendy’s ____ ____

Comments On McDonalds Asset Management:
(3) DEBT MANAGEMENT:
FY 2011 FY 2012
Total Debt to Total Assets:

McDonalds ____ ____
Wendy’s ____ ____

Times Interest Earned:

McDonalds ____ ____
Wendy’s ____ ____

Comments On McDonalds Debt Management:
(4) PROFITABILITY:
FY 2011 FY 2012
Net profit Margin:

McDonalds ____ ____
Wendy’s ____ ____

Return on Assets:

McDonalds ____ ____
Wendy’s ____ ____

Return on Equity:

McDonalds ____ ____
Wendy’s ____ ____

Modified Du Pont Equation, FY 2012:

McDonalds Wendy’s
Net Profit Margin ____ ____
Total Asset Turnover ____ ____
Equity Multiplier ____ ____

Comments On McDonalds Profitability:
(5) MARKET VALUE RATIOS:
FY 2011 FY 2012
PE Ratio:

McDonalds ____ ____
Wendy’s ____ ____

Market to Book Ratio:

McDonalds ____ ____
Wendy’s ____ ____

Comments On McDonalds Market Value Ratios:

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