Question

Using the company McDonald (2017 or 2018) annual report (or Form 10-K) from the company's Investor Relations web page and other credible internet sources, develop a short (1.5 to 2 page) profile of the corporation. Obtain and attach a PDF version of the most recent annual report (or Form 10-K) from the company's web site. Include the following information:

Name of the corporation and location of corporate headquarters.

State of incorporation.

The stock exchange on which the company's stock is traded.

Nature of its operations.

The fiscal year end date of the annual report you used.

Total assets on the balance sheet.

Total revenues on the recent income statement.

Net income on the income statement.

The basic earnings per share reported on the recent income statement.

The depreciation method used by the corporation.

The inventory method used by the corporation. If the company does not report inventory on its balance sheet, state that in your report.

Description of classes of stock (e.g. common, preferred, Class A, etc.) and the number of shares authorized, issued and outstanding for each class, from the balance sheet or notes.

Market price of the stock on 10/12/2018 (Use Yahoo finance or other stock quote site).

High and low prices of stock for the past 12 months (also known as 52-week range) (Use Yahoo finance or other stock quote site).

Dividends paid for each of share of stock during the year covered by the annual report from the income statement or notes.

The name of the Registered Public Accounting Firm who audited the company's financial statements.

Discuss something that you found interesting in the annual report, that you didn't know before.

If you had $10,000 to invest, would you invest in the stock of the corporation you chose. Provide your opinion and support your opinion with evidence from your research.

Answer 1

This information has been gathered using Form 10-K (2017)

Name of the Corporation:	McDonald’s Corporation
Location of the Headquarters:	One McDonald’s Plaza, Oak Brook, Illinois Zip Code: 60523
State of incorporation:	Delaware
The stock exchange on which the company's stock is traded:	New York Stock Exchange
Nature of its operations	The Company operates and franchises McDonald’s restaurants, which serve a locally-relevant menu of quality food and beverages which are sold in more than 100 countries. McDonald’s global system is comprised of both Company-owned and franchised restaurants. The Company is primarily a franchisor, with more than 90% of McDonald's restaurants currently owned and operated by independent franchisees. McDonald's believes franchising is paramount to delivering great-tasting food, locally-relevant customer experiences and driving profitability. The Company’s revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales along with minimum rent payments, and initial fees. Further, the Company also has an equity investment in a limited number of foreign affiliated markets, referred to as “affiliates.” In these markets, the Company receives a royalty based on a percent of sales and records its share of net results in Equity in earnings of unconsolidated affiliates.
The fiscal year end date of the annual report you used.	December 31, 2017
Total assets on the balance sheet.	$ 33,803.7
Total revenues on the recent income	$ 22, 820.4
Net income on the income statement.	$ 5,192.3
The basic earnings per share reported on the recent income statement.	$ 6.43 – EPS Basic $ 6.37 – EPS Diluted
The depreciation method used by the corporation.	Property Plant & Equipment: Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: -Buildings–up to 40 years; -Leasehold improvements–the lesser of useful lives of assets or lease terms, which generally include certain option periods; and Equipment–3 to 12 years. Long lived assets: They are reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The inventory method used by the corporation:	Cost or market value, whichever is lower.
Description of classes of stock and the number of shares authorized, issued and outstanding for each class:	Preferred stock, authorized – 165.0 million shares; issued – none.        (There will be no outstanding if no preferred stock is issued) Common stock, authorized – 3.5 billion shares; issued – 1,660.6 million shares, outstanding – 794 million shares
Market price of the stock on 10/12/2018
High and low prices of stock for the past 12 months	Highest Price: $188.90 Lowest Price: $ 146.84 (within 1 year from 27/11/2018)
Dividends paid for each of share of stock during the year	Total dividend paid for each share is $ 3.83
The name of the Registered Public Accounting Firm who audited the company's financial statements.	Ernst & Young LLP
Discuss something that you found interesting in the annual report, which you didn't know before.	Management Discussion and Analysis of Financial Condition and Result of operations. I didn’t know that it also includes strategic direction and future outlook of the business operations and certain targets which have been set for 2018. I found it interesting to know about the analysis of their current performance and growth with valid reasoning and future plans considering various aspects such as customer centric growth strategy, and digital and delivery strategy.
If you had $10,000 to invest, would you invest in the stock of the corporation you chose.	As of 30th June 2018, McDonald’s have surpassed Wall Street expectations for the fourth quarter. The growth of sales was more than 5%. In the last 10 years, McDonald’s have given more than 300% return which would include stock appreciation and dividend gains. Currently, the company is rolling out new fresh patties at in various countries as well as the company is expanding its menu for smart and affordable pricing. McDonald’s is the third largest restaurant chain in the US. McDonalds also has heavily invested in McCafe which is all set to bring in new customers. As compared to its peers, Wendy’s, Yum!Brands or Starbucks, the P/E ratio of McDonalds is lower than Starbucks but higher then Wendy’s and Yum!Brands, which does make McDonalds slightly expensive. The restaurant business is changing quickly, because of delivery options made available by Uber Eats and GrubHub, which could put McDonald on the front foot because of its well positioned market share. So, considering its future outlook for automation and digitalization, solid growth prospects, fair valuation and a solid brand, I would definitely invest in this stock.