Question

Could you please summarize the following?

Thank you

(1) LIQUIDITY:

         FY 2017          FY 2018

Current Ratio:

Mcdonald’s.                _1.84___                     _1.36___

Wendy’s                      _1.78___                     __2.34__

Quick Ratio:

                                  Mcdonald’s                 1.82____                     _1.35___

            Wendy’s                      _1.77___                     __2.33__

Comments On The Company’s 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 2017          FY 2018

Total Asset Turnover:

Mcdonald’s.                _.68___                       _.63___

            Wendy’s                      _.30___                _.38___

Average Collection Period:

Mcdonald’s                 __31.6__                     __42.4__

           Wendy’s                       __34.6__                ____

(3) DEBT MANAGEMENT:

         FY 2017          FY 2018

FY 2017          FY 2018

Total Debt to Total Assets:

Mcdonald’s                 _110%___                   __119.07__

            Wendy’s                      _86%___                     __.64__

Times Interest Earned:

Mcdonald’s                 __9.1X__                    _8.71___

            Wendy’s                      __2.4X__                    ____

           

(4) PROFITABILITY:

         FY 2017          FY 2018

Net profit Margin:

Mcdonald’s.                _22.8%___                  _28.18___

            Wendy’s                      _15.9 %___                 _4.7%___

Return on Assets:

Mcdonalds                  _15.3 %___                 _%15.82___

           Wendy’s                       __ 4.74%__                 __ 10.83%__

Return on Equity:

Mcdonald’s                 _0___              __0__

           Wendy’s                       _ 33.9%___                 _79.14%___

Modified Du Pont Equation, FY 2018:

                                                                     Mcdonald’s.     Wendy’s

Net Profit Margin                    _28.2%___                  _28.94__

Total Asset Turnover              _.64%___                    _.38___

Equity Multiplier                     ____                         _7.9376___

(5) MARKET VALUE RATIOS:

         FY 2017          FY 2018

         FY 2017          FY 2018

PE Ratio:

Mcdonald’s.                _$26.72___                 __$23.55__

            Wendy’s                      _$20.83___                 _$9.22___

Market to Book Ratio:

                                                                                                                                         

Mcdonald’s.                _-41.30___                  _22.13___

            Wendy’s                      $6.82____                   _$6.45___

:

PART 4, CONCLUSIONS AND RECOMMENDATIONS

‑ Summarize your analysis. Review your comments in the financial analysis section and provide your assessment of the overall status of the firm. Include any recommendations you think are appropriate.

Answer 1

PARTICULARS FINANCIAL YEAR 2016 FY 2017

LIQUIDITY

1.CURRENT RATIO : MCDONALDS COMPANY current ratio for the financial year 2017 is more than financial year 2018.

It describes about the company ability to pay its short term liabilities or those dues within the year decreases .

.WENDY S COMPANY current ratio for the financial year 2018 is more than for the financial year 2017 ,Its a good sign to the company .It means company can able to pay its short term liabilities when its due .

2.QUICK RATIO : FY 2017 FY 2018

MCDONALD'S 1.82 1.35

WENDYS 1.77 2.33

quick ratio is also called as acid test ratio . Is used to gauge company liquidity.

1. mcdonalds company quick ratio is decreased from FY 2017 to FY 2018 .Its not a good sign to the company and investors feels that its difficult to the company to pay its short term liability.

2.WENDYS company quick ratio is increased to the next year .so its easy to the wendys company to pay its short tern liabilities

ASSET MANAGEMENT :1.TOTAL ASSETS TURNOVER

The total asset turnover ratio calculates net sales as a percentage of assets to show how many sales are generated from each dollar of company assets

MCDONALDS company asset turnover ratio is decreased from FY 2017 to FY 2018.it means company is not using the assets effectively .

WENDYS company asset turnover ratio is increased from FY 2017 to FY 2018 .It describes company using the assets and generating the more revenues .

PROFITABILITY RATIO

NET PROFIT MARGIN :   

MCDONALDS company net profit margin is incresed from FY 2017 to FY 2018.its increases around 6% in a year .

A high net profit margin indicates that a business is pricing its products correctly and is exercising good cost control.

WENDYS company net profit margin is decreased from 15.9% to 4.7% .

By seeing this ratio an analyst can assume company is not pricing its products correctly.

RETURN ON ASSETS

MCDONALDS company return on assets are increased from FY 2017 TO FY 2018.But the growth is very less .

Return on assets (ROA) measures how efficient a company's management is in generating earnings from their economic resources or assets on their balance sheet.

WENDYS company return on assest's (ROA) is greter than the previous year .

The company returns are getting more by using the company assets situated in the balance sheet.