Mc Donalds Power Point Final

13,843
-1

Published on

As a group project, we analyzed McDonald\'s from a financial perspective. We all learned a great deal about a top brand. I created the slideshow incorporating numerous graphics and ensured a consistent look throughout. Enjoy!

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
13,843
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
322
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Mc Donalds Power Point Final

  1. 1. Mark Cohen, Elaine Hirt, Kyle Larkin, Zachary Rogers & JaanaValimaki<br />
  2. 2. Presentation Topics<br />History & Company Description<br />Product Offerings<br />Industry Attributes<br />Profitability<br />Cash & Growth<br />Capital Structure<br />Asset Structure<br />Competitors—Burger King & Wendy’s<br />Stock Summary<br />
  3. 3. History of the Corporation<br />1940: Dick and Mac McDonald opened McDonald’s<br />Bar-B-Que in San Bernardino, California<br />
  4. 4. Key Milestones<br />1948: “Speedee Service System” Key item: 15 cent hamburger<br />1954: Salesman Ray Kroc Goes West <br />1955: The McDonald’s Corporation opened the first McDonald’s<br />1961: Ray Kroc bought all rights to McDonald’s for $2.7 million<br />
  5. 5. Key Milestones—1963<br /><ul><li> One Billion Hamburgers Sold
  6. 6. The 500th Restaurant Opened
  7. 7. The 500th Student Graduates from Hamburger University
  8. 8. McDonald's Net Income Exceeded $1 Million
  9. 9. Ronald McDonald's First TV Commercial</li></li></ul><li>What Is McDonald’s?<br />Headquarters Oak Brook, Illinois<br />Traded in NYSE: MCD<br />Auditing done by Ernst & Young LLP<br />CEO: Jim Skinner<br />McDonald’s is the leading global foodservice retailer with nearly 32,000 local restaurants in more than 100 countries. <br />McDonald's successful “Plan to Win” <br />Large scale efficiency and local flair<br />Serving 58 million customers daily worldwide<br />Revenues in 2008 at record $23.5 billion<br />Returned $5.8 billion to shareholders in 2008<br />
  10. 10. Traditional Products<br />
  11. 11. Non-Traditional Products<br />
  12. 12. Fast Food Industry Attributes<br />Quick Service, Convenience, Inexpensive<br />Industry Worldwide Sales: Over $100 Billion<br />
  13. 13. McDonald’s Attributes<br /><ul><li> Quick Service
  14. 14. Systematic Production & Efficiency
  15. 15. Convenience
  16. 16. Located Everywhere
  17. 17. Solid Brand Recognition
  18. 18. Familiar Menu
  19. 19. Drive-Thru
  20. 20. Inexpensive
  21. 21. Pricing Leader
  22. 22. McDonald’s: $23.5 Billion
  23. 23. 23% of Industry Market</li></li></ul><li>McDonald’s Profitability<br />Net Income Increased to a Record of<br /> $4.3 Billion in 2008<br />Net Income Increased in the last 6 Years (Except for 2007)<br /><ul><li>Latam Transaction
  24. 24. Impairment Charges of $1.7 Billion
  25. 25. Otherwise, 2007 Net Income $4.1 Billion</li></ul>Worldwide Operating Income<br /><ul><li>60% Overseas Operating Income</li></li></ul><li>More Cash, Less Assets<br /><ul><li> Sold 1,600 Restaurants in Latin America & Caribbean
  26. 26. Focused Resources on Markets to Cash In the Biggest Opportunities
  27. 27. Over 71% of Total Assets are Land & Equipment Net Accumulated Depreciation & Amortization
  28. 28. Greatly Improved Operations Streamlined Production</li></li></ul><li>Assets Making Money<br /><ul><li>For Every Dollar of Assets, 20.8 Cents is Produced
  29. 29. McDonald’s is Very Cash Rich—Ready Access to Capital
  30. 30. Can Easily Pay Its Debts Plus Debts of Competitors
  31. 31. Highest Credit Ratio in Restaurant Industry</li></li></ul><li>Smarter Strategies = Growth<br /><ul><li> Leveraged Dramatic Growth in Net Income
  32. 32. Decrease Non-Operating Income Expense
  33. 33. Investment Sale Loss
  34. 34. Income Tax Deferment Saving $140.6 Million
  35. 35. Improved Impairment from $1,670.3 Million to $6.0 Million
  36. 36. Accounts Receivable Dropped Bringing In $122.6 Million in Cash
  37. 37. More Cash Spent on Property & Equipment
  38. 38. Gained More Cash on Sale of Businesses & Property</li></li></ul><li>2010 Short Term Growth Plans<br />Open 1,000 New Stores<br />Remodel 2,300 Stores<br />Continue Growth Targets<br /><ul><li>3-5% Sales Growth
  39. 39. 6-7% Operating Income Growth
  40. 40. Increase Capital Expenditures to $2.4 Billion for Strategic Brand Investments</li></ul>McDonald’s Financial Press Release 11/12/2009<br />
  41. 41. Company Financing<br />Equal Use of Debt & Equity<br />Long-Term Debt of Bank Loans & Bonds<br />$2 billion Unused Credit Line<br />
  42. 42. Company Financing<br />Slowly Increasing its Use of Debt<br />Increasing its Risk<br />
  43. 43. Company Financing – Risk <br />Liquidity<br /><ul><li>Current Ratio of 1.39</li></ul>Ability to Cover Debt Payments<br /><ul><li>Times Interest Earned of 14.5</li></ul>Overall - Moderate Risk<br />
  44. 44. Company Financing – Profitability<br />Financial Leverage – Increasing ROE<br />
  45. 45. Asset Structure – Capital Intensity<br />Relatively Easy Market Entry: +/- $900K per Store<br />Difficult to Match Size<br /><ul><li>995 New Stores in 2008
  46. 46. Net Fixed Assets of $20 Billion</li></li></ul><li>Asset Structure - Breakdown<br />Very Little Asset Structure Change<br />Investing Activities Show Growth<br /><ul><li>Capital Expenditures of $2.3 Billion
  47. 47. Depreciation of $1.2 Billion </li></li></ul><li>Asset Structure - ROA<br />Profit Margin<br /><ul><li>Product Differentiation
  48. 48. Efficiency</li></ul>Asset Turnover<br /><ul><li>Cost Leadership
  49. 49. Effectiveness</li></li></ul><li>Asset Structure - Risk<br />Significant Operating Leverage<br /><ul><li>3-Year Trend</li></ul>Revenue ↑ 12.6 %<br />Net Income ↑ 21.7%<br />
  50. 50. Asset Structure - Unrecorded<br />Advertising Expense of +/- $800 Million<br />Significant Local Franchisee Expense<br />
  51. 51. Number 1 Asset—Brand Name<br />Coca-Cola ($68,734 million)<br />IBM ($60,211 million)<br />Microsoft ($56,647 million)<br />GE ($47,777 million)<br />Nokia ($34,864 million)<br />McDonald's ($32,275 million)<br />Google ($31,980 million)<br />Toyota ($31,330 million)<br />Intel ($30,636 million)<br />Disney ($28,447 million)<br />BusinessWeek’s 2009 Report: 100 Best Global Brand Values as of 09/21/2009<br />
  52. 52. Competitors—Burgers to Burgers<br /><ul><li>Burger King Holdings
  53. 53. Wendy’s International</li></li></ul><li>Number of Locations<br />
  54. 54. McDonald’s Relative to Major Stock Indices<br />
  55. 55. Stock Summary<br />Stock Price Grew Consistently Past 3 Years<br /><ul><li>From $24.83 in 2003 to $61.59 today
  56. 56. Stock Advisors—Buy!</li></li></ul><li>Questions???<br />

×