Mcdonalds, NYSE: MCD

SEC 10-K Link: http://d18rn0p25nwr6d.cloudfront.net/CIK-0000063908/94ad07bd-66c3-433c-a81e-94f1587b0ed8.pdf#MCD-12312018X10K_HTM_SC1088762024556CFBE18A4A1A544A0C0

Question:

• Calculate the Gross Profit and the Gross Profit Percentage for this year and last year, creating a small table, such as the following:

	This Year	Last Year
Net Sales	$1,200	$1,400
Cost of Goods Sold	800	1,200
Gross Profit	400	200
Gross Profit Percentage	33%	14%

In the example above, sales decreased, gross profit increased, and the gross profit percentage increased. Therefore, sales are more profitable. We made 33 cents of gross profit on every dollar of sales this year, but only 14 cents of gross profit on every dollar of sales last year. Sales decreased, but sales are actually generating more profit overall, both as an absolute dollar value and as a percentage.