Prepare a Financial Analysis Report- use Word file to write your report (20pages + -) The analysis should also include comparison against the financial statements of a MCDonalds. There is already provided Excel sheet ratio, vertical and horizontal analysis
2016 McDonald's Corporation Income Statement Consolidated Results of Operations for the Years Ended December 31 (Dollars in millions except per share data) 2018 2017 Sales and revenues Sales by Company-operated restaurants 10,012.7 12,718.9 Revenues from franchised restaurants 11.012.5 10,101.5 Total sales and revenues 21,025.2 22,820.4 Cost of goods sold -10 239 -12 200 Gross Profit 10 786 10 620 15,295.0 9,326.9 24,621.9 -14 417 10 205 Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 3,153.8 2,937.9 2.174.2 1,973.3 2,200.2 (236.8) 12,202.6 4,033.5 3,528.5 2.847.6 1.790.0 2.231.3 (1,163.2) 13,267.7 4,896.9 4,134.2 3,667.7 1.718.4 2,384.5 75.7 16,877.4 Operating income Interest expense-net of capitalized interest Nonoperating (income) expense, net Profit before taxes 8,822.6 981.2 25,3 7,816.1 9,552.7 921.3 57.9 8,573.5 7,744.5 884.8 (-6.3) 6,866.0 Provision for insome taxes Net income 1,891.8 5,924.3 3,381.2 5,192.3 2.179.5 4.686.5 2016 McDonald's Corporation Balance Sheet Consolidated Financial Position at December 31 (Dollars in millions) 2018 2017 Asset Current assets Cash and equivalents 866.0 2,463.8 Accounts and notes receivable 2,441.5 1,976.2 Inventories, at cost, not in excess of market 51,1 58,8 Prepaid expenses and other current assets 694.6 828.4 Assets of businesses held for sale 0 0 Total current assets 4,053.2 5,327.2 1,223.4 1,474.1 58,9 565.2 1,527.0 4,848.6 Investments in and advances to affiliates Goodwill Miscellaneous Total other assets 1,202.8 2,331.5 2,381.0 5,915.3 1,085.7 2,379.7 2,562.8 6,028.2 725.9 2,336,5 1,855.3 4,917.7 Property and equipment, at cost Accumulated depreciation and amortization Net property and equipment Total assets 37,193.6 (14,350.9) 22,842.7 32,811.2 36,626.4 (14,178.1) 22,448.3 33,803.7 34.443.4 (13,185.8) 21,257.6 31,023.9 Liabilities and Shareholders' Equity Current liabilities Accounts payable Income taxes Other taxes Accrued interest Accrued payroll and other liabilities Current maturities of long-term debt Liabilities of businesses held for sale Total current liabilities 1,207.9 228.3 253.7 297.0 986.6 924.8 265.8 275.4 278.4 1,146.2 756.0 267.2 266.3 247.5 1,159.3 77.2 694.8 3,468.3 - 2,973.5 2,890.6 29,536.4 2.370.9 0 1,154.4 1,119.4 37070,8 25,878.5 1,010.6 0 1,053.7 1,817.1 33228,3 Long-term debt 31,075.3 Long-term income taxes 2,081.2 Deferred revenues - initial franchise fees 627.8 Other long-term liabilities 1,096.3 Deferred income taxes 1,215.5 Total liabilities 39069,6 Shareholders' equity (deficit) Preferred stock, no par value; authorized - 165.0 million shares; issued Common stock, $.01 par value; authorized - 3.5 billion 16,6 Additional paid-in capital 7,376,0 Retained earnings 50,487.0 Accumulated other comprehensive income (2,609.5) Common stock in treasury, at cost; 893.5 and 866.5 mil (61,528.5) Total shareholders' equity (deficit) (6,258.4) Total liabilities and shareholders' equity (deficit) 32,811.2 none 16,6 7,072.4 48,325.8 (2,178.4) (56,504.4) (3,268.0) 33,803.7 16,6 6,757.9 46.222.7 (3,092.9) (52,108.6) (2,204.3) 31,023.9 McDonald's Corporation Income Statement Vertical Common Size (%) 2018 100,00% 48,70% 51,30% 2017 100,00% Total sales and revenues Cost of goods sold Gross Profit 2016 100,00% 58,56% 41,45% 53,46% 46,54% 17,67% 15,46% Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 15,00% 13,97% 10,34% 9,38% 10,46% 1,12% 58,04% 12,48% 7,84% 9.78% 19,89% 16,79% 14,89% 6,98% 9,68% 0,30% 0,30% 0.05% 58,14% Operating income Interest expense-net of capitalized interest Nonoperating income) expense, net Profit before taxes 41,96% 4,67% 0,12% 37,17% 41,86% 4,04% 0.25% 37,57% 31,45% 3,59% 0,02% 27,89% Provision for insome taxes Net income 8,99% 28,18% 14,82% 22,75% 8,85% 19,03% McDonald's Corporation Income Statement Total sales and revenues Cost of goods sold Gross Profit Horizontal Common Size (%) 2018 85.39% 71,02% 105,70% 2017 92,69% 84,62% 104,07% 2016 100,00% 100,00% 100,00% Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 64,40% 71,04% 59.29% 114,84% 92,28% 314,67% 72,30% 82,37% 85,34% 77.64% 104,19% 93,58% 1550,67% 78,61% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% Operating income Interest expense-net of capitalized interest Nonoperating income) expense, net Profit before taxes 113,92% 110,97% 416,67% 113,84% 123,35% 104,19% 950,00% 124,86% 100,00% 100,00% 100,00% 100,00% Provision for insome taxes Net income 86,78% 126,42% 155,16% 110,80% 100,00% 100,00% 2017 2016 31,61 13,23 27,59 1,76 McDonald's Corporation Three Year Ratio Comparison UNIT 2018 Liquidity: Days' sales in receivables Days 42,38 Accounts receivable turnover Times/year 9,52 Accounts receivable turnover Days 38,34 Days' sales in inventory Days 1,82 Inventory turnover Times Times/year 186,33 Inventory turnover Days 1,96 Operating cycle Days 40,3 Working capital in millions) SEK 1079,7 Current ratio N/A 1,36 Acid-test ratio N/A 1,23 Cash ratio N/A 1,23 207,31 1,76 29,35 2436,6 1,84 1,06 1,06 21,85 11,37 32,97 1,49 196,82 1,86 34,83 1380,3 1,4 0,63 0,63 11,96 11,96 Sales to working capital Times/year Operating cash flow/current maturities of long-term del Times/year N/A 11,83 773,29 N/A BURGER KING COMPANY AND SUBSIDIARIES Vertical Common Size (%) 2018 Total sales and revenue Cost of sales Gross profit 100% 33,94% 66,06% Selling, general and administrative expenses Other operating expenses (income), net Interest expense, net Operating profit 22,66% 0,15% 9,99% 32,80% 35,78% 9,99% Income from operations Interest expense, net Loss on early extinguishment of debt Income before income taxes 25,80% Income tax expenses Net income 4,44% 21,36% BURGER KING COMPANY AND SUBSIDIARIES Horizontal Common Size (%) 2018 Total sales and revenue Cost of sales Gross profit 117% 106,50% 123,35% Selling, general and administrative expenses Other operating expenses (income), net Interest expense, net Operating profit 291,83% 7,34% 104,49% 169,43% 110,49% 104,49% Income from operations Interest expense, net Loss on early extinguishment of debt Income before income taxes 125,52% Income tax expenses Net income 177,61% 118,30% 2016 McDonald's Corporation Income Statement Consolidated Results of Operations for the Years Ended December 31 (Dollars in millions except per share data) 2018 2017 Sales and revenues Sales by Company-operated restaurants 10,012.7 12,718.9 Revenues from franchised restaurants 11.012.5 10,101.5 Total sales and revenues 21,025.2 22,820.4 Cost of goods sold -10 239 -12 200 Gross Profit 10 786 10 620 15,295.0 9,326.9 24,621.9 -14 417 10 205 Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 3,153.8 2,937.9 2.174.2 1,973.3 2,200.2 (236.8) 12,202.6 4,033.5 3,528.5 2.847.6 1.790.0 2.231.3 (1,163.2) 13,267.7 4,896.9 4,134.2 3,667.7 1.718.4 2,384.5 75.7 16,877.4 Operating income Interest expense-net of capitalized interest Nonoperating (income) expense, net Profit before taxes 8,822.6 981.2 25,3 7,816.1 9,552.7 921.3 57.9 8,573.5 7,744.5 884.8 (-6.3) 6,866.0 Provision for insome taxes Net income 1,891.8 5,924.3 3,381.2 5,192.3 2.179.5 4.686.5 2016 McDonald's Corporation Balance Sheet Consolidated Financial Position at December 31 (Dollars in millions) 2018 2017 Asset Current assets Cash and equivalents 866.0 2,463.8 Accounts and notes receivable 2,441.5 1,976.2 Inventories, at cost, not in excess of market 51,1 58,8 Prepaid expenses and other current assets 694.6 828.4 Assets of businesses held for sale 0 0 Total current assets 4,053.2 5,327.2 1,223.4 1,474.1 58,9 565.2 1,527.0 4,848.6 Investments in and advances to affiliates Goodwill Miscellaneous Total other assets 1,202.8 2,331.5 2,381.0 5,915.3 1,085.7 2,379.7 2,562.8 6,028.2 725.9 2,336,5 1,855.3 4,917.7 Property and equipment, at cost Accumulated depreciation and amortization Net property and equipment Total assets 37,193.6 (14,350.9) 22,842.7 32,811.2 36,626.4 (14,178.1) 22,448.3 33,803.7 34.443.4 (13,185.8) 21,257.6 31,023.9 Liabilities and Shareholders' Equity Current liabilities Accounts payable Income taxes Other taxes Accrued interest Accrued payroll and other liabilities Current maturities of long-term debt Liabilities of businesses held for sale Total current liabilities 1,207.9 228.3 253.7 297.0 986.6 924.8 265.8 275.4 278.4 1,146.2 756.0 267.2 266.3 247.5 1,159.3 77.2 694.8 3,468.3 - 2,973.5 2,890.6 29,536.4 2.370.9 0 1,154.4 1,119.4 37070,8 25,878.5 1,010.6 0 1,053.7 1,817.1 33228,3 Long-term debt 31,075.3 Long-term income taxes 2,081.2 Deferred revenues - initial franchise fees 627.8 Other long-term liabilities 1,096.3 Deferred income taxes 1,215.5 Total liabilities 39069,6 Shareholders' equity (deficit) Preferred stock, no par value; authorized - 165.0 million shares; issued Common stock, $.01 par value; authorized - 3.5 billion 16,6 Additional paid-in capital 7,376,0 Retained earnings 50,487.0 Accumulated other comprehensive income (2,609.5) Common stock in treasury, at cost; 893.5 and 866.5 mil (61,528.5) Total shareholders' equity (deficit) (6,258.4) Total liabilities and shareholders' equity (deficit) 32,811.2 none 16,6 7,072.4 48,325.8 (2,178.4) (56,504.4) (3,268.0) 33,803.7 16,6 6,757.9 46.222.7 (3,092.9) (52,108.6) (2,204.3) 31,023.9 McDonald's Corporation Income Statement Vertical Common Size (%) 2018 100,00% 48,70% 51,30% 2017 100,00% Total sales and revenues Cost of goods sold Gross Profit 2016 100,00% 58,56% 41,45% 53,46% 46,54% 17,67% 15,46% Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 15,00% 13,97% 10,34% 9,38% 10,46% 1,12% 58,04% 12,48% 7,84% 9.78% 19,89% 16,79% 14,89% 6,98% 9,68% 0,30% 0,30% 0.05% 58,14% Operating income Interest expense-net of capitalized interest Nonoperating income) expense, net Profit before taxes 41,96% 4,67% 0,12% 37,17% 41,86% 4,04% 0.25% 37,57% 31,45% 3,59% 0,02% 27,89% Provision for insome taxes Net income 8,99% 28,18% 14,82% 22,75% 8,85% 19,03% McDonald's Corporation Income Statement Total sales and revenues Cost of goods sold Gross Profit Horizontal Common Size (%) 2018 85.39% 71,02% 105,70% 2017 92,69% 84,62% 104,07% 2016 100,00% 100,00% 100,00% Company-operated restaurant expenses Food & paper Payroll & employee benefits Occupancy & other operating expenses Franchised restaurants-occupancy expenses Selling, general & administrative expenses Other operating (income) expense, net Total operating costs and expenses 64,40% 71,04% 59.29% 114,84% 92,28% 314,67% 72,30% 82,37% 85,34% 77.64% 104,19% 93,58% 1550,67% 78,61% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% Operating income Interest expense-net of capitalized interest Nonoperating income) expense, net Profit before taxes 113,92% 110,97% 416,67% 113,84% 123,35% 104,19% 950,00% 124,86% 100,00% 100,00% 100,00% 100,00% Provision for insome taxes Net income 86,78% 126,42% 155,16% 110,80% 100,00% 100,00% 2017 2016 31,61 13,23 27,59 1,76 McDonald's Corporation Three Year Ratio Comparison UNIT 2018 Liquidity: Days' sales in receivables Days 42,38 Accounts receivable turnover Times/year 9,52 Accounts receivable turnover Days 38,34 Days' sales in inventory Days 1,82 Inventory turnover Times Times/year 186,33 Inventory turnover Days 1,96 Operating cycle Days 40,3 Working capital in millions) SEK 1079,7 Current ratio N/A 1,36 Acid-test ratio N/A 1,23 Cash ratio N/A 1,23 207,31 1,76 29,35 2436,6 1,84 1,06 1,06 21,85 11,37 32,97 1,49 196,82 1,86 34,83 1380,3 1,4 0,63 0,63 11,96 11,96 Sales to working capital Times/year Operating cash flow/current maturities of long-term del Times/year N/A 11,83 773,29 N/A BURGER KING COMPANY AND SUBSIDIARIES Vertical Common Size (%) 2018 Total sales and revenue Cost of sales Gross profit 100% 33,94% 66,06% Selling, general and administrative expenses Other operating expenses (income), net Interest expense, net Operating profit 22,66% 0,15% 9,99% 32,80% 35,78% 9,99% Income from operations Interest expense, net Loss on early extinguishment of debt Income before income taxes 25,80% Income tax expenses Net income 4,44% 21,36% BURGER KING COMPANY AND SUBSIDIARIES Horizontal Common Size (%) 2018 Total sales and revenue Cost of sales Gross profit 117% 106,50% 123,35% Selling, general and administrative expenses Other operating expenses (income), net Interest expense, net Operating profit 291,83% 7,34% 104,49% 169,43% 110,49% 104,49% Income from operations Interest expense, net Loss on early extinguishment of debt Income before income taxes 125,52% Income tax expenses Net income 177,61% 118,30%
