financial analysis: mcdonald's
DESCRIPTION
TRANSCRIPT
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Investment Analysis Team 9
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OUTLINE
• Company Information
• Market Data Review
• Financial Analysis
• Investment Recommendation
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COMPANY INFORMATION
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COMPANY INFORMATION
-Leading global foodservice retailer -34,000 local restaurants -Serving approximately 69 million people in 118 countries each day.
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MARKET DATA REVIEW
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MARKET DATA
P/E RATIO
MARKET CAP
EARNINGS-PER-SHARE
17.56
97.21B
5.54
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FINANCIAL ANALYSIS
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FINANCIAL ANALYSIS
• Historical Growth Rates
• Competitive Analysis
• Profitability, Efficiency, Liquidity, Solvency, Performance and Coverage
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HISTORICAL GROWTH RATES
FY 2012 FY 2011 FY 2010
Revenue 1.7% 12.7% 5%
Operating Income 1% 14% 9%
Net Income 0.7% 11% 9%
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HISTORICAL GROWTH RATESNet Income Revenue Operating Income
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HISTORICAL GROWTH RATES
5 YEAR DIVIDEND PAYOUT
GROWTH OF 15.5%
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COMPETITIVE ANALYSIS
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• Profitability
• Efficiency
• Liquidity
COMPETITIVE ANALYSIS
• Solvency
• Coverage
• Performance
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PROFITABILITY
Mcdonald’s Burger King Yum!
Operating Profit Margin
31.2% 26.7% 16.8%
Net Profit Margin 19.8% 5.9% 11.7%
ROA 55.5% 9.4% 108.5%ROE 36.8% 10.0% 70%
Assumed figures are as of FY 2012
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PROFITABILITYOperating Profit Margin Net Profit Margin
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PROFITABILITYROA ROE
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EFFICIENCY
Mcdonald’s Burger King Yum!
Fixed Assets Turnover 116% 205.7% 328%
Equity Turnover 185.7% 176.8% 654%
Total Asset Turnover 80.6% 35.2% 644.5%
Assumed figures are as of FY 2012
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EFFICIENCYFixed Assets Turnover Equity TurnoverTotal Asset Turnover
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LIQUIDITY
Mcdonald’s Burger King Yum!
Current Ratio 1.45x 2.2x 0.87x
Quick Ratio 1.09x 1.8x 0.49x
Cash Ratio 0.69x 1.3x 0.35x
Assumed figures are as of FY 2012
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LIQUIDITYCurrent Ratio Quick Ratio Cash Ratio
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SOLVENCY
Mcdonald’s Burger King Yum!
Debt-to-Asset Ratio 0.58x 0.78x 0.74x
Debt-to-Equity Ratio 1.31x 3.73x 2.97x
Financial Leverage
Ratio2.31x 4.73x 3.99x
Assumed figures are as of FY 2012
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SOLVENCYDebt-to-Asset Ratio Debt-to-Equity RatioFinancial Leverage Ratio
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PERFORMANCE
Mcdonald’s Burger King Yum!
Cash Flow-to-Revenue 25.3% 11.4% 16.8%
Cash ROA 20.4% 4.0% 108.5%
Cash ROE 46.9% 20.1% 110.1%
Assumed figures are as of FY 2012
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PERFORMANCECash Flow-to-Revenue Cash ROA Cash ROE
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COVERAGE
Mcdonald’s Burger King Yum!
Debt Coverage 0.35x 0.05x 0.34x
Debt Payment 16.64x 0.99x 15.40x
Assumed figures are as of FY 2012
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PERFORMANCEDebt Coverage Debt Payment
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SUMMARY OF ANALYSIS
• Market momentum
• Not overvalued
• Highly Profitable
• Highly Efficient
• Very Liquid
• Strong Cash Flow
• Can pay debts
• Solvent
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INVESTMENT RECOMMENDATION
Fundamentally speaking, we recommend a
strong BUY position in Mcdonald’s
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End of Presentation