Executive Summary

McDonald’s has proven to be a dominant competitor in the fast food industry. The corporation’s financial records indicate an overall growth throughout the span of the last 3 years. According to Jim Skinner, The Vice President and CEO of McDonalds, the corporation has increased global sales by 5.6%. McDonald’s has been recognized as the top performing company in the Dow Jones Index by providing a 6 billion dollar return to shareholders during the year of 2011. McDonalds has expanded into international areas and generated 40% of their overall sales in Europe. McDonald’s market price per common share has increased by almost 61% from 2009 to 2011. Through the calculations of the Liquidity ratios, Long Term Solvency Ratios, Market Value Ratios, NWC Management Ratios, Asset Utilization Ratios, and Profitability ratios, McDonalds has demonstrated an overall increase in their financial figures throughout the course of 2009 to 2011.

The Liquidity Ratios of McDonalds have gradually increased from 2009 to 2011. In 2009 the Liquidity Ratios were significantly lower than they were in 2010. The reason for that being is that McDonalds saw an increase in cash and assets in 2010 from 2009. From 2009 to 2010, the Cash & Cash Equiv. to Total Assets Ratio rose from .06 to .07, the Current Ratio rose from 1.14 to 1.49, and The Interval Measure rate rose from 35.25 days to 45.2 days. In 2011 the Cash & Cash Equivalencies to Total Assets Ratio stayed constant at .07, The Current ratio decreased from 1.49 to 1.25 and The Interval Measure Rate decreased from 45.20 days to 39.56 days. The numbers indicate that there is a more efficient use of networking capital in 2009 and 2011. 2010 had higher rates meaning that the working capital was not being utilized as efficiently since the overall liquidity of the company was higher. The year 2010 had the lowest amount of current liabilities, which resulted in the high liquidity ratios. The numbers indicate that in 2010...