Business Finance
McDonalds Financial Analysis and Managerial Decisions Project

Question Description

Need help with my Excel question - I’m studying for my class.

Using the principles learned throughout the class critically answer the following question assuming the roles of CEO & CFO: What is your recommendation to the Board of Directors in order to maximize shareholder value? Grading will be based on how well students critically apply concepts in class to evaluate the company and at the minimum include the following:

Company in this project: McDonald's

(i) company overview, key managers and managerial decisions, financial history and background;

(ii) complete financial analysis using a variety of methods (i.e. ratios, DCF, WACC v. ROIC, equity/debt, etc.);

(iii) compare against peer groups/competitors;

(iv) final recommendation(s). The final recommendation(s) may include a valuation of the company, buy/sell decisions, acquisition/merger, take-over, alternative options, etc. Creativity is also encouraged.

Minimum 10 pages Maximum 25 Pages. 1.5 line spacing. Font 12pt either Times New Roman. Exhibit pages for your work, references, etc. unlimited. APA Standard acceptable.

What Financial Analysis Methods Should You/Your Group Be Considering?

✓ Financial Ratios

✓ Financial Review from Statements

✓ Peer Groups / Industry

✓ Discounted Cash Flow / Financial Projections

✓ Equity Markets / Stock Markets

✓ Company’s Capital Structure

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

Please find answer.Let me know for any clarifications.Pleasure working with you.Good Bye.

MCDONALD'S CORP (MCD) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data.
Revenue
Cost of revenue
Gross profit
Operating expenses
Sales, General and administrative
Total operating expenses
Operating income
Interest Expense
Other income (expense)
Income before taxes
Provision for income taxes
Net income from continuing operations
Net income
Net income available to common shareholders
Earnings per share
Basic
Diluted
Weighted average shares outstanding
Basic
Diluted
EBITDA

2017-12 2018-12 2019-12
22820
21025
21076
12200
10239
9961
10621
10786
11115
2231
2231
8390
921
1105
8574
3381
5192
5192
5192

2200
2200
8586
981
212
7816
1892
5924
5924
5924

2229
2229
8886
1122
254
8018
1993
6025
6025
6025

6.43
6.37

7.61
7.54

7.95
7.88

807
816
10858

778
786
10279

758
765
10758

MCDONALD'S CORP (MCD) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. USD in millions except per share data.
Assets
Current assets
Cash
Cash and cash equivalents
Total cash
Receivables
Inventories
Prepaid expenses
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Gross property, plant and equipment
Accumulated Depreciation
Net property, plant and equipment
Equity and other investments
Goodwill
Other long-term assets
Total non-current assets
Total assets
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt
Capital leases
Accounts payable
Taxes payable
Accrued liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Capital leases
Deferred taxes liabilities
Deferred revenues
Other long-term liabilities
Total non-current liabilities
Total liabilities
Stockholders' equity
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Accumulated other comprehensive income
Total stockholders' equity

2017-12 2018-12 2019-12

2464
2464
1976
59
828

866
866
2442
51
695

898
898
2224
50
385

5327

4053

3558

36626
-14178
22448
1086
2380
2563
28476
33804

37194
-14351
22843
1203
2332
2381
28758
32811

52312
-14891
37421
1270
2677
2584
43953
47511

925
541
1425

1208
482
1284

59
621
988
579
1374

2891

2974

3621

29536

31075

1119
3525
34181
37072

1216
628
3178
36096
39070

34118
12758
1318
661
3246
52100
55721

17
7072
48326
-56504
-2178
-3268

17
7376
50487
-61528
-2610
-6258

17
7654
52930
-66329
-2483
-8210

Total liabilities and stockholders' equity

33804

32811

47511

MCDONALD'S CORP (MCD) Statement of CASH FLOW
Fiscal year ends in December. USD in millions except per share data.
Cash Flows From Operating Activities
Net income
Depreciation & amortization
Deferred income taxes
Stock based compensation
Change in working capital
Accounts receivable
Inventory
Accounts payable
Accrued liabilities
Income taxes payable
Other non-cash items
Net cash provided by operating activities
Cash Flows From Investing Activities
Investments in property, plant, and equipment
Property, plant, and equipment reductions
Acquisitions, net
Other investing activities
Net cash used for investing activities
Cash Flows From Financing Activities
Debt issued
Debt repayment
Common stock repurchased
Dividend paid
Other financing activities
Net cash provided by (used for) financing activities
Effect of exchange rate changes
Net change in cash
Cash at beginning of period
Cash at end of period
Free Cash Flow
Operating cash flow
Capital expenditure
Free cash flow

2017-12 2018-12 2019-12
5192
1363
-36
118
-980
-341
-37
-60
-146
-396
-105
5551

5924
1482
103
125
-473
-479
-2
129
-87
-33
-195
6967

6025
1618
150
110
298
27
129
-27
-4
173
-79
8122

-1854
167
2495
-246
562

-2742
160
429
-303
-2455

-2394
151
-200
-628
-3071

4728
-1649
-4686
-3089
-614
-5311
264
1066
1223
2290

3794
-1760
-5208
-3256
479
-5950
-160
-1598
2464
866

4499
-2062
-4976
-3582
1126
-4995
-24
32
866
898

5551
-1854
3698

6967
-2742
4225

8122
-2394
5728


FINANCE PROJECT

1

Finance Project Assignment

Name
University Name
Course
March 29, 2020

FINANCE PROJECT

2

Contents
1. Background Information ........................................................................................................ 3
1.1 Company Overview ......................................................................................................... 3
1.2Key Managers and Managerial Decisions ............................................................................ 3
1.3Financial History and Background ................................................................................... 4
2. Complete Financial Analysis ................................................................................................. 6
2.1 Revenue, Net Income and Price Per share ....................................................................... 6
2.2 Stock Market .................................................................................................................... 6
2.3 Financial Ratios ............................................................................................................... 7
2.3.1. Profitability Ratios ....................................................................................................... 8
2.3.2. Growth ......................................................................................................................... 8
2.3.4. Efficiency ratios ........................................................................................................... 8
2.3.5. Liquidity ratio .............................................................................................................. 9
2.4 McDonald's Capital Structure .......................................................................................... 9
2.5. Financial Projections ....................................................................................................... 9
3. Peer Group/Industry ............................................................

psumanrec (4252)
UC Berkeley

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