Question

1. FOR MCDONALDS CORP: WHAT IS THE 2018 AND 2017 TIMES INTEREST EARNED

2. FOR MCDONALDS CORP: WHAT IS THE 2018 AND 2017 WHAT IS THE TOTAL DEBT TO TOTAL ASSETS

3. FOR MCDONALDS CORP: WHAT IS THE 2018 AND 2017 AVERAGE COLLECTION PERIOD

Answer 1

The Answers of all the three questions are mentioned below:

1.) For Mcdonalds corp: Times interest Earned (2017)

Times interest Earned = Earning before interest and Tax (EBIT) / Gross interest expense

Times interest Earned = $ 8390000000 / $ 926000000

Times interst Earned = 9 Times

b.) For Mc donalds corp: Times interest Earned (2018)

Times interest Earned : EBIT / Gross interst Expense

Times Interest Earned : $ 8586000000 / $ 986000000

Times Interest Earned : 8.71 Times

Question 2. Total debt to Total Assets 2017

Total Debt to Assets = Total Liabilities / Total Assets *100

Total debt to assets = $ 37,072000000 / $ 33804000000 *100

Total debt to Assets = 109.67 %

B part - Total debt to assets 2018

Total debt to assets = Total liability / Total Assets * 100

Total debts to total assets = 39070000000 / 32811000000 * 100

Total debts to total assets = 119.07 %

Question 3. Average Collection Period (2017)

Avg collection period = 365 / Accounts receivables turnover

To calculate Average accounts receivables we need to know the "beginning of accounts receivable and closing accounts receivables" but in the balance sheet of MC DONALDS CORP the information is not given but only given the Accounts receivable turnover figure which is sufficient to calculate the Average collection period for 2017 and 2018.

The Accounts receivable turnover of 2017 is 11.55

Avg collection period = 365 / 11.55

Avg collection period = 31.60 Days

B part Average collection period (2018)

The accounts receivables turnover of 2018 is 8.61

Avg collection period = 365 / 8.61

Avg collection period = 42.40 days