McDonald’s 2009 financial statements contain the following selected data (in millions).

Instructions

(a) Compute the following values and provide a brief interpretation of each.
(1) Working capital. (3) Debt to total assets ratio.
(2) Current ratio. (4) Times interest earned ratio.

(b) The notes to McDonald’s financial statements show that subsequent to 2009 the company will have future minimum lease payments under operating leases of $10,717.5 million. If these assets had been purchased with debt, assets and liabilities would rise by approximately $8,800 million. Recompute the debt to total assets ratio after adjusting for this. Discuss your result.

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Current assets $ 3,416.3 Total assets Current liabilities Total liabilities 30,224.9 Income taxes 2,988.7 Net income Interest expense $ 473.2 1,936.0 4,551.0 16,191.0