Stock Analysis on Net
Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Adjustments to Financial Statements: Removal of Goodwill

McDonald’s Corp., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 56,146,800 50,435,600 53,854,300 52,626,800 47,510,800
Less: Goodwill 3,040,400 2,900,400 2,782,500 2,773,100 2,677,400
Total assets (adjusted) 53,106,400 47,535,200 51,071,800 49,853,700 44,833,400
Adjustment to Shareholders’ Equity (deficit)
Shareholders’ equity (deficit) (as reported) (4,706,700) (6,003,400) (4,601,000) (7,824,900) (8,210,300)
Less: Goodwill 3,040,400 2,900,400 2,782,500 2,773,100 2,677,400
Shareholders’ equity (deficit) (adjusted) (7,747,100) (8,903,800) (7,383,500) (10,598,000) (10,887,700)
Adjustment to Net Income
Net income (as reported) 8,468,800 6,177,400 7,545,200 4,730,500 6,025,400
Add: Goodwill impairment losses — — — — 99,400
Net income (adjusted) 8,468,800 6,177,400 7,545,200 4,730,500 6,124,800

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).

McDonald’s Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

McDonald’s Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 33.22% 26.65% 32.49% 24.63% 28.59%
Adjusted net profit margin 33.22% 26.65% 32.49% 24.63% 29.06%
Total Asset Turnover
Reported total asset turnover 0.45 0.46 0.43 0.36 0.44
Adjusted total asset turnover 0.48 0.49 0.45 0.39 0.47
Financial Leverage
Reported financial leverage — — — — —
Adjusted financial leverage — — — — —
Return on Equity (ROE)
Reported ROE — — — — —
Adjusted ROE — — — — —
Return on Assets (ROA)
Reported ROA 15.08% 12.25% 14.01% 8.99% 12.68%
Adjusted ROA 15.95% 13.00% 14.77% 9.49% 13.66%

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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. McDonald’s Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McDonald’s Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McDonald’s Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

McDonald’s Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 8,468,800 6,177,400 7,545,200 4,730,500 6,025,400
Revenues 25,493,700 23,182,600 23,222,900 19,207,800 21,076,500
Profitability Ratio
Net profit margin1 33.22% 26.65% 32.49% 24.63% 28.59%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income 8,468,800 6,177,400 7,545,200 4,730,500 6,124,800
Revenues 25,493,700 23,182,600 23,222,900 19,207,800 21,076,500
Profitability Ratio
Adjusted net profit margin2 33.22% 26.65% 32.49% 24.63% 29.06%

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 Net profit margin = 100 × Net income ÷ Revenues
= 100 × 8,468,800 ÷ 25,493,700 = 33.22%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 8,468,800 ÷ 25,493,700 = 33.22%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. McDonald’s Corp. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenues 25,493,700 23,182,600 23,222,900 19,207,800 21,076,500
Total assets 56,146,800 50,435,600 53,854,300 52,626,800 47,510,800
Activity Ratio
Total asset turnover1 0.45 0.46 0.43 0.36 0.44
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenues 25,493,700 23,182,600 23,222,900 19,207,800 21,076,500
Adjusted total assets 53,106,400 47,535,200 51,071,800 49,853,700 44,833,400
Activity Ratio
Adjusted total asset turnover2 0.48 0.49 0.45 0.39 0.47

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).

2023 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 25,493,700 ÷ 56,146,800 = 0.45

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 25,493,700 ÷ 53,106,400 = 0.48

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McDonald’s Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets 56,146,800 50,435,600 53,854,300 52,626,800 47,510,800
Shareholders’ equity (deficit) (4,706,700) (6,003,400) (4,601,000) (7,824,900) (8,210,300)
Solvency Ratio
Financial leverage1 — — — — —
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 53,106,400 47,535,200 51,071,800 49,853,700 44,833,400
Adjusted shareholders’ equity (deficit) (7,747,100) (8,903,800) (7,383,500) (10,598,000) (10,887,700)
Solvency Ratio
Adjusted financial leverage2 — — — — —

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 Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 56,146,800 ÷ -4,706,700 = —

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity (deficit)
= 53,106,400 ÷ -7,747,100 = —

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 8,468,800 6,177,400 7,545,200 4,730,500 6,025,400
Shareholders’ equity (deficit) (4,706,700) (6,003,400) (4,601,000) (7,824,900) (8,210,300)
Profitability Ratio
ROE1 — — — — —
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income 8,468,800 6,177,400 7,545,200 4,730,500 6,124,800
Adjusted shareholders’ equity (deficit) (7,747,100) (8,903,800) (7,383,500) (10,598,000) (10,887,700)
Profitability Ratio
Adjusted ROE2 — — — — —

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 ROE = 100 × Net income ÷ Shareholders’ equity (deficit)
= 100 × 8,468,800 ÷ -4,706,700 = —

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity (deficit)
= 100 × 8,468,800 ÷ -7,747,100 = —

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 8,468,800 6,177,400 7,545,200 4,730,500 6,025,400
Total assets 56,146,800 50,435,600 53,854,300 52,626,800 47,510,800
Profitability Ratio
ROA1 15.08% 12.25% 14.01% 8.99% 12.68%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income 8,468,800 6,177,400 7,545,200 4,730,500 6,124,800
Adjusted total assets 53,106,400 47,535,200 51,071,800 49,853,700 44,833,400
Profitability Ratio
Adjusted ROA2 15.95% 13.00% 14.77% 9.49% 13.66%

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 ROA = 100 × Net income ÷ Total assets
= 100 × 8,468,800 ÷ 56,146,800 = 15.08%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 8,468,800 ÷ 53,106,400 = 15.95%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McDonald’s Corp. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.