Financial Ratios Using the following McDonald’s 2 previous years financial state
ID: 2714191 • Letter: F
Question
Financial Ratios
Using the following McDonald’s 2 previous years financial statements (Income Statement and Balance Sheet), solve the following financial ratios (two years is needed for the averaged numbers, otherwise for non-averaged ratios use the most recent year being 2014).
2014
http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/McDonald's%202014%20Annual%20Report.PDF
2013
http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/McDs2013AnnualReport.pdf
If you want to answer a related question on an acceptable range of these ratios in regards to a company like McDonald's in the fast food industry, go to the following link.
https://www.chegg.com/homework-help/questions-and-answers/financial-ratios-please-give-acceptable-range-ratio-regards-company-like-mcdonalds-fast-fo-q9220171
Ratios Computation Answer Current Ratio = (Current Assets)÷(Current Liabilites) Quick or Acid-test Ratio = (Cash, Short-term Investments, and Net Receivables)÷(Current Liabilites) Accounts Receivable Turnover = (Net Sales)÷(Average Trade Receivables (net)) Inventory Turnover = (Cost of Goods Sold)÷(Average Inventory) Asset Turnover = (Net Sales)÷(Average Total Assets) Profit Margin on Sales = (Net Income)÷(Net Sales) Return on Assets = (Net Income)÷(Average Total Assets) Return on Common Stock Equity = (Net Income - Preferred Dividends)÷(Average Common Stockholders' Equity) Earnings Per Share = (Net Income - Preferred Dividends)÷(Weighted-average Number of Shares Outstanding) Payout Ratio = (Cash Dividends)÷(Net Income) Debt to Assets Ratio = (Total Liabilites)÷(Total Assets) Times Interest Earned = (Income Before Income Taxes and Interest Expense)÷(Interest Expense) Book Value Per Share = (Common Stockholders' Equity)÷(Outstanding Shares)Explanation / Answer
Current Ratio = 4185.5 / 2747.9 = 1.52
Quick Ratio = (2077.9 + 1214.4) / 2747.9 = 1.20
Accounts Receivable turnover = 27441.3 / ((1214.4 + 1319.8)/2) = 21.66 days
Inventory turnover = 6129.7 / ((110.0 + 123.7)/2) = 52.46 days
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