McDonalds began in 1940 and was sold to Ray Kroc in 1955, becoming a publicly traded company. It is now the largest fast food chain globally with over 31,000 locations in 119 countries. McDonald's operates mainly as a franchisor, with over 25,000 franchised locations and the remainder company owned. The presentation analyzes McDonald's business model and financial statements, identifying main competitors and global expansion. Ratios are used to assess profitability, leverage, solvency, asset turnover, and other financial metrics. Future earnings and cash flows are predicted to remain strong, allowing continued growth and dividend payouts.

1. McDonalds By: Tara Ard Lauren Baker Brad Kruezinger Payal Patel Jessica Rivero

3. Company

4. Industry

5. Franchise Industry

6. Suppliers/Customers

7. Bargaining Power

8. Economy

9. Boom

10. Recession

11. Read Study the Financial Statements & Footnotes

12. Audit Report

13. Significant Transactions

14. Assessing Earnings Quality

15. Comparing the numbers to management’s biases

16. Analyzing the Financial Statements

17. Ratios

18. Predicting Future Earnings/Cash Flows

19. Future Earnings

20. Future Cash Flows

21. Estimates of Stock price

23. McDonald’s Business Model

24. McDonald’s Competitors According to Hoovers Main Competitors are: Burger King Subway Yum! (a.k.a. Taco Bell)

25. McDonald’s Competitors New Competitors emerging out of McDonald’s new McCafe line: Starbucks Dunkin Donuts

26. McDonald’s Globalization

28. Report of Independent Registered Public Accounting Firm-Ernst & Young

31. $2,395.1 million

32. Operating Income 2007

33. $3,879 million

34. Total Shareholder’s Equity 2007

35. $13,382 million

36. Net Income 2008

37. $4,313.2 million

38. Operating Income 2008

39. $6,442.9 million

40. Total Shareholder’s Equity 2008

41. $15,729.8 million

42. Property, Plant, & Equipment are recorded at cost and are depreciated using the straight-line method

43. Buildings up to 40 years

44. Equipment range 3 to 12 years

45. Goodwill

46. Comes from the purchases of restaurants from franchisees

47. Cash Equivalents

49. Policy is to determine likelihood of any outcomes or judgments and the probable loss

50. After careful analysis any needed accruals are made

53. Analyzing Financial Statements Profitability Ratios Return on Equity December 31, 2008=32.23 Return on Assets December 31, 2008=15.15 Return on Sales December 31, 2008=0.20

54. Leverage Ratios Common Equity Leverage December 31, 2008=0.92 Capital Structure Leverage December 31, 2008=2.02 Debt/Equity Ratio December 31, 2008=1.02 Long-term Debt Ratio December 31, 2008=0.36 Analyzing Financial Statements

55. Analyzing Financial Statements Solvency Ratios Current Ratio December 31, 2008=1.39 Quick Ratio December 31, 2008=1.20 Interest Coverage December 31, 2008=11.88 Accounts Payable Turnover December 31, 2008=27.51

56. Asset Turnover Ratios Receivables Turnover December 31, 2008=37.8 Inventory Turnover December 31, 2008=115.89 Fixed Assets Turnover December 31, 2008=1.14 Total Asset Turnover December 31, 2008=0.94 Analyzing Financial Statements

57. Analyzing Financial Statements Other Ratios Earnings per Share December 31, 2008=3.77 Price/Earnings Ratio December 31, 2008=16.5 Dividend Yield Ratio December 31, 2008=0.026 Stock Price Return December 31, 2008=0.08

58. Future Earnings- Cash Flows- Stock over/under priced- Predicting Future Earnings And Cash Flows

59. Overall Conclusion of Analysis McDonalds is strong enough to withstand recession and still payout dividends and create revenue McDonalds will continue to grow worldwide Etc.