utL Learling Activity Thursday by 11:59pmThis Learning Activity involves prepari
ID: 2813709 • Letter: U
Question
utL Learling Activity Thursday by 11:59pmThis Learning Activity involves preparing a preliminary financial analysis of one of the largest firms in the world, McDonalds Corporation. Locate the annual reports (10-K) of McDonalds (MCD) for the most recent three years reported. For this assignment, do NOT use the Dupont Method (if applicable). Using the financial statements, calculate and analyze the following financial ratios for McDonalds for the most recent three years reported: Profit Margin Return on Assets Return on Equity Debt to Total Assets . . Times Interest Eamed Current Ratio Quick Ratio Present your ratios first. Then, analyze each ratio trend. The analysis should address the following questions: 1. Is the ratio trend increasing or decreasing? 2. Why is there an increasing trend or a decreasing trend? 3. Is this trend favorable or unfavorable? Why? 4. What might the firm do to change the ratio? Your analysis should be written in the APA-format or the MLA-format, double-spaced Times New Roman, 12-point font, properly cited. Your submission should not exceed three total pages. your analysis in one Microsoft-compatible file. (You may embed an Excel table in a Word document or vice versa if you choose,) owing links may be helpful: cDonalds Corporate Information Search for a company at SEC -http://www.sec.gov/edgar/searchedgar/companysearch.html (Links to an external site.Links to an external site.Explanation / Answer
Boatler requires $850,000. At 12% for two years, interest payable for 2 years shall be (assuming annual payments)
850000 * 12% * 2 = $204,000.00
If however, the company uses shorter term financing:
Year 1 interest : 850000 * 7.75% = $ 65875.00
Year 2 interest : 850000 * 13.55% = $ 115,175.00
Total interest for 2 years = $ 181,050.00
Hence the company is better off using the shorter term financing.
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