Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Short-term Activity Ratios (Summary)

McDonald’s Corp., short-term (operating) activity ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Turnover Ratios
Inventory turnover 155.76 141.94 144.74 136.62 154.59
Receivables turnover 3.92 4.14 5.23 3.86 4.24
Payables turnover 7.46 7.53 7.99 9.42 7.85
Working capital turnover 8.64 5.39 3.13 131.28
Average No. Days
Average inventory processing period 2 3 3 3 2
Add: Average receivable collection period 93 88 70 95 86
Operating cycle 95 91 73 98 88
Less: Average payables payment period 49 48 46 39 46
Cash conversion cycle 46 43 27 59 42

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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. McDonald’s Corp. inventory turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. McDonald’s Corp. receivables turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. McDonald’s Corp. payables turnover ratio decreased from 2021 to 2022 and from 2022 to 2023.
Working capital turnover An activity ratio calculated as revenue divided by working capital. McDonald’s Corp. working capital turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. McDonald’s Corp. number of days of receivables outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.
Operating cycle Equal to average inventory processing period plus average receivables collection period. McDonald’s Corp. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. McDonald’s Corp. number of days of payables outstanding increased from 2021 to 2022 and from 2022 to 2023.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. McDonald’s Corp. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Inventory Turnover

McDonald’s Corp., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Company-operated restaurant expenses 8,224,100 7,380,900 8,047,300 6,981,200 7,760,600
Inventories, at cost, not in excess of market 52,800 52,000 55,600 51,100 50,200
Short-term Activity Ratio
Inventory turnover1 155.76 141.94 144.74 136.62 154.59
Benchmarks
Inventory Turnover, Competitors2
Carnival Corp. & plc 27.12 27.47 13.08 24.61 30.23
Chipotle Mexican Grill Inc. 185.34 184.27 177.91 186.94 170.29
Starbucks Corp. 14.46 10.97 12.89 11.90 12.44
Inventory Turnover, Sector
Consumer Services 32.57 25.32 25.06 23.58 29.12
Inventory Turnover, Industry
Consumer Discretionary 7.05 6.73 7.05 7.53 7.82

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).

1 2023 Calculation
Inventory turnover = Company-operated restaurant expenses ÷ Inventories, at cost, not in excess of market
= 8,224,100 ÷ 52,800 = 155.76

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. McDonald’s Corp. inventory turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Receivables Turnover

McDonald’s Corp., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Sales by Company-operated restaurants 9,741,600 8,748,400 9,787,400 8,139,200 9,420,800
Accounts and notes receivable 2,488,000 2,115,000 1,872,400 2,110,300 2,224,200
Short-term Activity Ratio
Receivables turnover1 3.92 4.14 5.23 3.86 4.24
Benchmarks
Receivables Turnover, Competitors2
Airbnb Inc. 39.83 42.00 42.04 17.80
Booking Holdings Inc. 6.57 7.67 8.07 12.85 8.97
Carnival Corp. & plc 38.84 30.81 7.76 20.49 46.90
Chipotle Mexican Grill Inc. 85.44 80.79 75.77 57.27 69.36
Starbucks Corp. 30.38 27.44 30.92 26.62 30.15
Receivables Turnover, Sector
Consumer Services 13.82 14.03 14.01 13.06 14.58
Receivables Turnover, Industry
Consumer Discretionary 17.96 17.99 21.11 21.76 21.69

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).

1 2023 Calculation
Receivables turnover = Sales by Company-operated restaurants ÷ Accounts and notes receivable
= 9,741,600 ÷ 2,488,000 = 3.92

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. McDonald’s Corp. receivables turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Payables Turnover

McDonald’s Corp., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Company-operated restaurant expenses 8,224,100 7,380,900 8,047,300 6,981,200 7,760,600
Accounts payable 1,102,900 980,200 1,006,800 741,300 988,200
Short-term Activity Ratio
Payables turnover1 7.46 7.53 7.99 9.42 7.85
Benchmarks
Payables Turnover, Competitors2
Airbnb Inc. 12.08 10.94 9.77 10.96
Booking Holdings Inc. 6.14 6.82 6.91 9.25 12.16
Carnival Corp. & plc 12.26 11.20 5.84 13.21 17.08
Chipotle Mexican Grill Inc. 36.86 35.61 35.79 40.52 38.37
Starbucks Corp. 16.92 16.57 17.06 18.50 15.99
Payables Turnover, Sector
Consumer Services 10.35 10.82 10.51 14.03 13.80
Payables Turnover, Industry
Consumer Discretionary 5.23 4.84 4.67 4.77 5.59

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).

1 2023 Calculation
Payables turnover = Company-operated restaurant expenses ÷ Accounts payable
= 8,224,100 ÷ 1,102,900 = 7.46

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. McDonald’s Corp. payables turnover ratio decreased from 2021 to 2022 and from 2022 to 2023.

Working Capital Turnover

McDonald’s Corp., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Current assets 7,986,400 5,424,200 7,148,500 6,243,200 3,557,900
Less: Current liabilities 6,859,000 3,802,100 4,020,000 6,181,200 3,621,000
Working capital 1,127,400 1,622,100 3,128,500 62,000 (63,100)
 
Sales by Company-operated restaurants 9,741,600 8,748,400 9,787,400 8,139,200 9,420,800
Short-term Activity Ratio
Working capital turnover1 8.64 5.39 3.13 131.28
Benchmarks
Working Capital Turnover, Competitors2
Airbnb Inc. 1.51 1.22 0.99 0.89
Booking Holdings Inc. 5.77 2.33 1.59 0.77 3.37
Carnival Corp. & plc 2.98
Chipotle Mexican Grill Inc. 16.73 34.00 14.86 10.01 13.77
Starbucks Corp. 18.11 51.17
Working Capital Turnover, Sector
Consumer Services 29.13 8.05 3.65 3.43
Working Capital Turnover, Industry
Consumer Discretionary 16.06 19.31 10.96 13.27 32.45

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).

1 2023 Calculation
Working capital turnover = Sales by Company-operated restaurants ÷ Working capital
= 9,741,600 ÷ 1,127,400 = 8.64

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. McDonald’s Corp. working capital turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Average Inventory Processing Period

McDonald’s Corp., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Inventory turnover 155.76 141.94 144.74 136.62 154.59
Short-term Activity Ratio (no. days)
Average inventory processing period1 2 3 3 3 2
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Carnival Corp. & plc 13 13 28 15 12
Chipotle Mexican Grill Inc. 2 2 2 2 2
Starbucks Corp. 25 33 28 31 29
Average Inventory Processing Period, Sector
Consumer Services 11 14 15 15 13
Average Inventory Processing Period, Industry
Consumer Discretionary 52 54 52 48 47

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).

1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 155.76 = 2

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period.

Average Receivable Collection Period

McDonald’s Corp., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Receivables turnover 3.92 4.14 5.23 3.86 4.24
Short-term Activity Ratio (no. days)
Average receivable collection period1 93 88 70 95 86
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Airbnb Inc. 9 9 9 21
Booking Holdings Inc. 56 48 45 28 41
Carnival Corp. & plc 9 12 47 18 8
Chipotle Mexican Grill Inc. 4 5 5 6 5
Starbucks Corp. 12 13 12 14 12
Average Receivable Collection Period, Sector
Consumer Services 26 26 26 28 25
Average Receivable Collection Period, Industry
Consumer Discretionary 20 20 17 17 17

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).

1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 3.92 = 93

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. McDonald’s Corp. number of days of receivables outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.

Operating Cycle

McDonald’s Corp., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 2 3 3 3 2
Average receivable collection period 93 88 70 95 86
Short-term Activity Ratio
Operating cycle1 95 91 73 98 88
Benchmarks
Operating Cycle, Competitors2
Carnival Corp. & plc 22 25 75 33 20
Chipotle Mexican Grill Inc. 6 7 7 8 7
Starbucks Corp. 37 46 40 45 41
Operating Cycle, Sector
Consumer Services 37 40 41 43 38
Operating Cycle, Industry
Consumer Discretionary 72 74 69 65 64

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).

1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 2 + 93 = 95

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. McDonald’s Corp. operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Payables Payment Period

McDonald’s Corp., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Payables turnover 7.46 7.53 7.99 9.42 7.85
Short-term Activity Ratio (no. days)
Average payables payment period1 49 48 46 39 46
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Airbnb Inc. 30 33 37 33
Booking Holdings Inc. 59 54 53 39 30
Carnival Corp. & plc 30 33 62 28 21
Chipotle Mexican Grill Inc. 10 10 10 9 10
Starbucks Corp. 22 22 21 20 23
Average Payables Payment Period, Sector
Consumer Services 35 34 35 26 26
Average Payables Payment Period, Industry
Consumer Discretionary 70 75 78 76 65

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).

1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.46 = 49

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. McDonald’s Corp. number of days of payables outstanding increased from 2021 to 2022 and from 2022 to 2023.

Cash Conversion Cycle

McDonald’s Corp., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data
Average inventory processing period 2 3 3 3 2
Average receivable collection period 93 88 70 95 86
Average payables payment period 49 48 46 39 46
Short-term Activity Ratio
Cash conversion cycle1 46 43 27 59 42
Benchmarks
Cash Conversion Cycle, Competitors2
Carnival Corp. & plc -8 -8 13 5 -1
Chipotle Mexican Grill Inc. -4 -3 -3 -1 -3
Starbucks Corp. 15 24 19 25 18
Cash Conversion Cycle, Sector
Consumer Services 2 6 6 17 12
Cash Conversion Cycle, Industry
Consumer Discretionary 2 -1 -9 -11 -1

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).

1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 2 + 9349 = 46

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. McDonald’s Corp. cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023.