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McDonald's Corp. (MCD) | Liquidity Analysis

Liquidity ratios measure the company's ability to meet its short-term obligations.


Ratios (Summary)

McDonald's Corp., liquidity ratios

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
Current ratio 1.45 1.25 1.49 1.14 1.39
Quick ratio 1.09 1.05 1.22 0.96 1.18
Cash ratio 0.69 0.67 0.82 0.60 0.81

Source: Based on data from McDonald's Corp. Annual Reports

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. McDonald's Corp.'s current ratio deteriorated from 2010 to 2011 but then improved from 2011 to 2012 not reaching 2010 level.
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. McDonald's Corp.'s quick ratio deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. McDonald's Corp.'s cash ratio deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.

Current Ratio

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in thousands)
Current assets 4,922,100  4,403,000  4,368,500  3,416,300  3,517,600 
Current liabilities 3,403,100  3,509,200  2,924,700  2,988,700  2,537,900 
  Current Ratio, Comparison to Industry
McDonald's Corp.1 1.45 1.25 1.49 1.14 1.39
  Industry, Consumer Services 1.11 1.19 1.19 1.17 1.06

Source: Based on data from McDonald's Corp. Annual Reports

2012 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 4,922,100 ÷ 3,403,100 = 1.45

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. McDonald's Corp.'s current ratio deteriorated from 2010 to 2011 but then improved from 2011 to 2012 not reaching 2010 level.

Quick Ratio

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in thousands)
Cash and equivalents 2,336,100  2,335,700  2,387,000  1,796,000  2,063,400 
Accounts and notes receivable 1,375,300  1,334,700  1,179,100  1,060,400  931,200 
Total quick assets 3,711,400  3,670,400  3,566,100  2,856,400  2,994,600 
Current liabilities 3,403,100  3,509,200  2,924,700  2,988,700  2,537,900 
  Quick Ratio, Comparison to Industry
McDonald's Corp.1 1.09 1.05 1.22 0.96 1.18
  Industry, Consumer Services 0.42 0.46 0.47 0.44 0.40

Source: Based on data from McDonald's Corp. Annual Reports

2012 Calculations

1 Quick ratio = Total quick assets ÷ Current liabilities
= 3,711,400 ÷ 3,403,100 = 1.09

Ratio Description The company
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. McDonald's Corp.'s quick ratio deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.

Cash Ratio

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    Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
  Selected Financial Data (USD $ in thousands)
Cash and equivalents 2,336,100  2,335,700  2,387,000  1,796,000  2,063,400 
Total cash assets 2,336,100  2,335,700  2,387,000  1,796,000  2,063,400 
Current liabilities 3,403,100  3,509,200  2,924,700  2,988,700  2,537,900 
  Cash Ratio, Comparison to Industry
McDonald's Corp.1 0.69 0.67 0.82 0.60 0.81
  Industry, Consumer Services 0.16 0.18 0.20 0.18 0.16

Source: Based on data from McDonald's Corp. Annual Reports

2012 Calculations

1 Cash ratio = Total cash assets ÷ Current liabilities
= 2,336,100 ÷ 3,403,100 = 0.69

Ratio Description The company
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. McDonald's Corp.'s cash ratio deteriorated from 2010 to 2011 but then slightly improved from 2011 to 2012.