In: Accounting
The balance sheet and income statement for the McDonald's are as follows.
McDonald's Corporation 2016 Income Statement ($ Millions) |
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McDonald's Corporation December 31, 2016 Balance Sheet ($ Millions) Assets |
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RATIO |
INDUSTRY NORM |
Current ratio |
0.70 |
Inventory turnover |
90 |
Average collection period |
6.5 days |
Debt ratio |
50% |
Total asset turnover |
1.5 |
Fixed asset turnover |
2 |
Operating profit margin |
21% |
Return on common equity |
15% |
2. Calculate the future sum of $5,000 given that it will be held in the bank 5 years at an annual interest rate of 6 percent.
3.
Solutions:
Current Ratio | |
Formula | Current Assets / Current Liabilities |
2016 | |
Current Assets | 1143 |
Current Liabilities | 2985 |
Current Ratio | 0.38 |
Inventory Turnover | |
Formula | Cost of goods sold / Average Inventory |
2016 | |
Inventory | 71 |
Cost of goods sold | 6537 |
Inventory Turnover | 92.07 |
Receivable Turnover | |
Turnover Ratio | Sales / Average accounts receivables |
2016 | |
Accounts receivables | 484 |
Credit Sales | 11508 |
AR Turnover ratio | 23.78 |
Average Collection period | |
Formula | 365 / Turnover ratio |
2016 | |
AR Turnover ratio | 23.78 |
Average collection period | 15.35 |
Total Asset Turnover | |
Formula | Total Sales / Average Total Asset |
2016 | |
Total Assets | 18242 |
Sales | 11508 |
Total Asset Turnover | 0.63 |
Fixed Asset Turnover | |
Formula | Total Sales / Average Total Asset |
2016 | |
Fixed Assets Assets | 14961 |
Sales | 11508 |
Fixed Asset Turnover | 0.77 |
Operating Profit Margin | |
Formula | Operating Profit / Sales |
2016 | |
Operating Profit | 2794 |
Sales | 11508 |
Gross Profit Margin | 24.28% |
Return on common stockholders equity | |
Formula | Net Income available to equity shareholders / Average Common Equity |
2019 | |
Common Equity | 8852 |
Net Income available to common equity holders | 1617 |
Return on common stockholders equity | 18.27% |
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