(2) ASSET MANAGEMENT FY 2017 FY 2018 Total Asset Turnover: Mcdonalds. ____ ____ Wendys ____ ____ Average Collection Period: Mcdonalds ____ ____ Wendys ____ ____ Comments On The Companys Asset Management PLEASE ANSWER THE FOLLOWING

Here is what I have so far:

McDonalds

• PE ratio

PE RATIO 2017

Market Price / EPS

= $153.49 / $6.61 = $23.22

Mcdonalds PE RATIO 2018

Market Price / EPS

= $189.90 / $7.54 = $25.19

• Market to book ratio

2017

Market Price / Book value per share

= $153.49 / $-6.01 = -25.54

2018

Market Price / Book value per share

= $189.90 / $-8.58 = -22.13

The PE ratio of McDonald's in the year 2017 was $23.22 while in 2018 it was $25.19, it shows that market has given a higher valuation to McDonald's in 2018 as compared to 2017. The price to book of the company was in negative for both the years. In 2017, it was -25.54, while in 2018 it was -22.13. A lower Market or price to book ratio is preferred. Since, the numbers are in negative, P/B ratio in 2017 was good then in 2018.

COMPETITOR WENDYS

PE Ratio

2017

Market Price / EPS

= $17.29 / $0.77 = 22.46

2018

Market Price / EPS

= $17.89 / $1.94 = 9.22

Market to book ratio

2017

Market Price / Book value per share

= $17.29 / $1.93 = 8.97

2018

Market Price / Book value per share

= $17.89 / $2.77 = 6.45

Wendy's

The PE ratio of the company in the year 2017 was 22.46 and in 2018 it was 9.22. Thus, it can be seen that market has reduced premium valuation given to Wendy's despite its increase in EPS. This may be due non operational profit in earnings etc.

The M/B ratio of the company is fairly stable, it was at 8.97 in the year 2017, while it is at 6.45 in 2018.