Stock Analysis on Net
Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

Analysis of Property, Plant and Equipment

Microsoft Excel

Property, Plant and Equipment Disclosure

McDonald’s Corp., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Land 7,081,300 6,686,300 6,487,600 6,349,100 6,026,400
Buildings and improvements on owned land 20,059,300 18,934,200 18,666,000 18,218,900 17,003,700
Buildings and improvements on leased land 13,322,300 12,492,000 13,283,300 13,364,500 12,605,900
Equipment, signs and seating 2,692,700 2,498,600 3,032,000 3,119,000 2,994,500
Other 414,400 426,500 447,700 425,000 420,400
Property and equipment, at cost 43,570,000 41,037,600 41,916,600 41,476,500 39,050,900
Accumulated depreciation and amortization (18,662,400) (17,264,000) (17,196,000) (16,518,300) (14,890,900)
Net property and equipment 24,907,600 23,773,600 24,720,600 24,958,200 24,160,000

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Property and equipment, at cost Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. McDonald’s Corp. property and equipment, at cost decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net property and equipment Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. McDonald’s Corp. net property and equipment decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Asset Age Ratios (Summary)

McDonald’s Corp., asset age ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Average age ratio 51.15% 50.26% 48.54% 47.02% 45.09%
Estimated total useful life (years) 24 24 23 24 24
Estimated age, time elapsed since purchase (years) 12 12 11 11 11
Estimated remaining life (years) 12 12 12 13 13

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. McDonald’s Corp. average age ratio of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. McDonald’s Corp. estimated total useful life of depreciable property, plant and equipment increased from 2021 to 2022 and from 2022 to 2023.
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. McDonald’s Corp. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.
Estimated remaining life McDonald’s Corp. estimated remaining life of depreciable property, plant and equipment decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Average Age

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Accumulated depreciation and amortization 18,662,400 17,264,000 17,196,000 16,518,300 14,890,900
Property and equipment, at cost 43,570,000 41,037,600 41,916,600 41,476,500 39,050,900
Land 7,081,300 6,686,300 6,487,600 6,349,100 6,026,400
Asset Age Ratio
Average age1 51.15% 50.26% 48.54% 47.02% 45.09%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, at cost – Land)
= 100 × 18,662,400 ÷ (43,570,000 – 7,081,300) = 51.15%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. McDonald’s Corp. average age ratio of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.

Estimated Total Useful Life

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Property and equipment, at cost 43,570,000 41,037,600 41,916,600 41,476,500 39,050,900
Land 7,081,300 6,686,300 6,487,600 6,349,100 6,026,400
Depreciation and amortization expense for property and equipment 1,501,500 1,454,000 1,530,700 1,469,400 1,392,200
Asset Age Ratio (Years)
Estimated total useful life1 24 24 23 24 24

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Estimated total useful life = (Property and equipment, at cost – Land) ÷ Depreciation and amortization expense for property and equipment
= (43,570,000 – 7,081,300) ÷ 1,501,500 = 24

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. McDonald’s Corp. estimated total useful life of depreciable property, plant and equipment increased from 2021 to 2022 and from 2022 to 2023.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Accumulated depreciation and amortization 18,662,400 17,264,000 17,196,000 16,518,300 14,890,900
Depreciation and amortization expense for property and equipment 1,501,500 1,454,000 1,530,700 1,469,400 1,392,200
Asset Age Ratio (Years)
Time elapsed since purchase1 12 12 11 11 11

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expense for property and equipment
= 18,662,400 ÷ 1,501,500 = 12

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. McDonald’s Corp. estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2021 to 2022 and from 2022 to 2023.

Estimated Remaining Life

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Net property and equipment 24,907,600 23,773,600 24,720,600 24,958,200 24,160,000
Land 7,081,300 6,686,300 6,487,600 6,349,100 6,026,400
Depreciation and amortization expense for property and equipment 1,501,500 1,454,000 1,530,700 1,469,400 1,392,200
Asset Age Ratio (Years)
Estimated remaining life1 12 12 12 13 13

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Estimated remaining life = (Net property and equipment – Land) ÷ Depreciation and amortization expense for property and equipment
= (24,907,600 – 7,081,300) ÷ 1,501,500 = 12

Asset age ratio Description The company
Estimated remaining life McDonald’s Corp. estimated remaining life of depreciable property, plant and equipment decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.