McDonald's is the largest restaurant Company in the world with 30,000 restaurants of which 8000 are Company owned, 18,000 owned by franchisees and 4000 owned by affiliated companies. Worldwide sales were $19.1 billion US dollars in 2004, which is remarkable in the intensely competitive restaurant sector. (www.galenet.galegroup.com) . Annual sales for the fiscal year ended 31 December 2004 was $32.00M in sales. Sales dipped in 1999 due to saturation in the flagship market of the United States and in 2001 after the 9/11 incidents, but in 2003, the Company planned a revitalization drive in accordance with which new foods have been introduced, including breakfast and salad products, which has, in turn, resulted in increased sales of 10% in the U.S and 8% in global sales in the first three quarters of 2004 (Barr, 2004). Gross profits for 2004 were $19,065 billion dollars, net income was $2,2,79 billion dollars. The return on assets was $14,201 with total outstanding shares of 1,270, hence the rate of return was fairly good with dividends per share being $0.55 and earnings per share being $1.79 (diluted) and stock valued at $32.06 at the year-end.(Financial Report 2004) Domestic growth has been pegged at about 5% while international operations show substantial growth at 10 to 15% each year and returns on assets have also held steady. Shareholders’ return on capital has been a consistent 18 to 19% from 1994 to 1999.. (www.news.morningstar.com). The Return on Investment has been at a comfortable level of 20% as compared to the average of 8% for most companies and it has a payout ratio of 15% leaving plenty of funds for investment purposes. The company’s financial leverage in terms of debt to equity was 2.2% in 1999 and PEG ratios (Price to Earnings Growth) was 2.6. McDonald's stock prices rose by 29 percent in 2004 and are up by $1.17 in 2005, with current stock prices at $33.23 per share.(www.biz.yahoo.com). The debt to equity leverage ratio for 2004 was 9:14, which provides the Company with good leverage.
* Barr, Aaron. (2004). “Inside McDonald's: How ‘I’m lovin’ it’ and its five note signature took the world by storm” ADWEEK, Nov 8, 2004, 45(42): p 28(2). [Online] Available in the Gale Database; http://galenet.galegroup.com/servlet/BCRC?vrsn=149&locID=embry&srchtp=art&c=1&ste=25&tab=2&tbst=tsAS&atp=SG&docNum=A124567038&art=Management+McDonalds&bConts=0; accessed 11/29/2005.
* “Classic growth – Stocks” [Online] Available at: http://news.morningstar.com/classroom2/printlesson.asp?docId=3080&CN=COM
* Carpenter, Dave. (2005) “McDonald’s shareholder going public.” [Online]
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McDonalds Corporation: Roles and Responsibilities: [Online] Available at: http://www.mcdonalds.com/corp/invest/gov/govprinciples/roles_and_responsibilities.html
* McDonalds Financial report (2004). [Online] Available at: http://126.96.36.199/interactive/mcd2004financialreport/md/page_001.php
* McDonalds 2005 Fact Sheet. [Online] Available at: http://mcd.mobular.net/mcd/90/8/10/
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