McDonalds Corporation (MCD) operates company-owned and franchised restaurants in over 100 countries. The company operates primarily as

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McDonald’s Corporation (MCD) operates company-owned and franchised restaurants in over 100 countries. The company operates primarily as a franchisor with approximately 85% of its current restaurants operated by franchisees. McDonald’s goal is to franchise approximately 95% of its restaurants in the long term.

McDonald’s operations are divided into the following segments:

▪ United States: Restaurants throughout the United States

▪ International Lead Markets: Restaurants in Australia, Canada, France, Germany, and the United Kingdom

▪ High Growth Markets: Restaurants in China, Italy, Korea, Poland, Russia, Spain, and Switzerland

▪ Foundational Markets & Corporate: Restaurants not contained in the preceding segments plus corporate activities

McDonald’s believes that the High Growth segment has significant potential for rapid growth and expansion. Recent data (in millions) for the first three primary segments are as follows:

High Growth $6,161 1,049 5,209 United States $ 8,253 3,769 11,961 International Lead $7,223 2,838 Sales Operating income


a. Determine the profit margin for each of the three segments. Round to one decimal place.

b. Determine the investment turnover for the three segments. Round to two decimal places.

c. Use the DuPont formula to determine the return on investment for the three segments. Round to one decimal place.

d. Analyze and interpret the results of (a), (b), and (c).

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Forensic And Investigative Accounting

ISBN: 9780808056300

10th Edition

Authors: G. Stevenson Smith D. Larry Crumbley, Edmund D. Fenton

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