McDonald’s Corp. (NYSE:MCD)

The financial data reveals distinctive trends in the company's asset base and equity position over the five-year period.

Reported Total Assets

The reported total assets exhibit some fluctuation, increasing from $52,627 million in 2020 to a peak of $56,147 million in 2023, followed by a slight decline to $55,182 million in 2024. This suggests a general trend of asset growth with a minor reduction in the final year.

Adjusted Total Assets

Adjusted total assets, which exclude goodwill, show a similar pattern with values consistently lower than reported assets. The adjusted assets rose from $49,854 million in 2020 to a high of $53,106 million in 2023, then declined to $52,037 million in 2024. The parallel movement between reported and adjusted assets indicates that goodwill adjustments remain proportional over time.

Reported Shareholders’ Equity (Deficit)

The reported shareholders’ equity was in deficit throughout the period but the deficit decreased from -$7,825 million in 2020 to -$3,797 million in 2024. There was some volatility, with a less negative equity in 2021 (-$4,601 million), deterioration in 2022 (-$6,003 million), followed by a recovery trend in the subsequent years. Overall, this reflects an improving but still negative equity position.

Adjusted Shareholders’ Equity (Deficit)

Similarly, the adjusted shareholders’ equity, which accounts for goodwill adjustments, remained negative and showed a comparable trend. The deficit improved from -$10,598 million in 2020 to -$6,942 million in 2024, with fluctuations in between. The adjustment increases the magnitude of the negative equity compared to reported figures, but the general pattern implies gradual improvement over time.

The analysis of the financial data over the five-year period reveals several notable trends and insights regarding asset efficiency and profitability metrics.

Total Asset Turnover (Reported and Adjusted)

Both reported and adjusted total asset turnover ratios exhibit a generally increasing trend from 2020 through 2024. The reported ratio rose from 0.36 in 2020 to 0.47 in 2024, showing a steady improvement in asset utilization. The adjusted ratio, which accounts for goodwill adjustments, consistently remains slightly higher than the reported ratio, starting at 0.39 in 2020 and reaching 0.50 in 2024. This indicates a modest but consistent enhancement in the company's ability to generate sales from its asset base over time.

Return on Assets (Reported and Adjusted)

The reported return on assets (ROA) displays a marked improvement between 2020 and 2021, jumping from 8.99% to 14.01%, followed by a slight decline in 2022 to 12.25%. Thereafter, it rebounds to 15.08% in 2023 and slightly declines to 14.9% in 2024. The adjusted ROA presents a similar pattern but consistently exceeds the reported ROA, starting from 9.49% in 2020 and culminating at 15.8% in 2024. This pattern suggests that excluding goodwill impacts yields a more favorable representation of operational profitability, with the company maintaining strong asset profitability throughout the period.

Financial Leverage and Return on Equity (ROE)

There is no data available for reported or adjusted financial leverage or return on equity in the presented timeframe, which limits the ability to assess the company's capital structure or equity returns trends.

In summary, the company demonstrates improving efficiency in asset utilization and solid returns on assets over the years analyzed. The adjustments for goodwill consistently enhance the valuations of asset turnover and ROA, suggesting that goodwill amounts might be diluting unadjusted profitability metrics. However, the absence of leverage and equity return data restricts a comprehensive assessment of the company’s overall financial performance and risk profile.

The analysis of the annual financial data reveals several notable trends in the reported and goodwill-adjusted figures over the five-year period ending December 31, 2024.

Total Assets

Reported total assets demonstrate a fluctuating pattern. Starting at $52,627 million in 2020, they increase slightly to $53,854 million in 2021 before declining to $50,436 million in 2022. A subsequent recovery occurs in 2023 with an increase to $56,147 million, followed by a slight decrease to $55,182 million in 2024.

The adjusted total assets, which exclude goodwill effects, follow a similar trajectory but consistently remain below the reported figures. These figures start at $49,854 million in 2020, rise to $51,072 million in 2021, then decrease to $47,535 million in 2022. A recovery trend is noticed again in 2023 with $53,106 million, followed by a minor decline to $52,037 million in 2024.

Total Asset Turnover

Reported total asset turnover improves steadily over the period. Beginning at 0.36 in 2020, it increases to 0.43 in 2021 and continues upward to peak at 0.46 in 2022. A slight dip to 0.45 occurs in 2023, followed by an increase to 0.47 in 2024.

The adjusted total asset turnover mirrors this positive trend, with values consistently higher than the reported turnover each year. Starting at 0.39 in 2020, this ratio climbs to 0.45 in 2021, reaches 0.49 in 2022, dips marginally to 0.48 in 2023, and finally rises to 0.50 in 2024.

Overall, the data indicate operational improvements reflected by increasing asset turnover ratios, suggesting enhanced efficiency in using assets to generate revenue. Despite fluctuations in total asset values, both reported and adjusted measures portray a recovery trend following a decline in 2022. The adjusted figures provide a clearer picture by mitigating the impact of goodwill, resulting in slightly higher turnover ratios consistently throughout the observed periods, implying that asset utilization excluding goodwill is more effective.

The financial data reveals several key trends in the company's asset base and equity position over the five-year period.

Total Assets

The reported total assets exhibit moderate fluctuations, starting at approximately $52.6 billion in 2020, slightly increasing to $53.9 billion in 2021, then declining to about $50.4 billion in 2022. Thereafter, a notable recovery occurs in 2023 with assets rising to $56.1 billion, followed by a slight decrease to $55.2 billion in 2024. The adjusted total assets follow a similar trend but at consistently lower levels, beginning near $49.9 billion in 2020 and ending close to $52.0 billion in 2024, reflecting adjustments mainly related to goodwill.

Shareholders’ Equity (Deficit)

The reported shareholders’ equity shows persistent negative values throughout the period, indicating a deficit position. Initially, the deficit is around $7.8 billion in 2020, improving to approximately $4.6 billion in 2021, yet it fluctuates in subsequent years with a dip back to $6.0 billion deficit in 2022, then improving again to $4.7 billion in 2023 and reducing further to about $3.8 billion deficit in 2024. Adjusted shareholders’ equity, which accounts for goodwill adjustments, mirrors this pattern but reflects a larger deficit across all years, starting at a deficit of nearly $10.6 billion in 2020 and improving progressively to roughly $6.9 billion deficit in 2024.

Financial Leverage

Data for both reported and adjusted financial leverage ratios are not provided, preventing analysis of leverage trends or risk exposure through debt levels during this timeframe.

Overall, asset levels have shown resilience with moderate volatility, while the persistent negative equity position suggests ongoing challenges in net asset value. Adjustments for goodwill have consistently increased the equity deficit, highlighting the impact of intangible asset accounting on the company’s financial structure. The absence of financial leverage figures limits a full assessment of capital structure dynamics.

The financial data presented indicates a consistent deficit in both reported and adjusted shareholders’ equity over the five-year period examined. The reported shareholders’ equity starts at -7,825 million US dollars in 2020 and shows some improvement by 2024, reaching -3,797 million US dollars. Despite this improvement, the values remain negative throughout the period, indicating that liabilities continue to exceed assets based on reported figures.

Similarly, the adjusted shareholders’ equity, which likely accounts for goodwill adjustments or other intangible asset considerations, also remains negative for all years reported. It begins at -10,598 million US dollars in 2020 and improves to -6,942 million US dollars by 2024. This adjusted measure consistently demonstrates a larger deficit compared to the reported shareholder equity, suggesting that adjustments exacerbate the equity deficit position.

The trend in both measures shows an overall reduction in the magnitude of the deficit, pointing to gradual strengthening in equity positions. However, the persistence of negative equity values throughout the period raises potential concerns about the company’s capital structure and financial stability.

Return on equity (ROE), both reported and adjusted, does not have data available for any of the years, so no analysis can be made regarding profitability or return metrics.

Shareholders’ Equity Trends

Both reported and adjusted shareholders’ equity demonstrate negative values each year, indicating ongoing deficits.

There is a generally positive trend toward decreasing deficits from 2020 to 2024, with the reported equity deficit improving by roughly 51% and the adjusted equity deficit improving by approximately 35% over the period.

The adjusted shareholders’ equity deficit consistently exceeds the reported deficit, implying significant downward adjustments related to goodwill or other factors.

Return on Equity

No data is provided for reported or adjusted ROE, precluding profitability analysis.

Total Assets

Reported total assets fluctuated over the five-year period. They increased slightly from 52,627 million US dollars in 2020 to 53,854 million in 2021, followed by a decline to 50,436 million in 2022. Subsequently, assets rose again to 56,147 million in 2023, before a minor decrease to 55,182 million in 2024. Adjusted total assets followed a similar pattern, starting at 49,854 million in 2020, increasing to 51,072 million in 2021, declining to 47,535 million in 2022, rebounding to 53,106 million in 2023, and then slightly falling to 52,037 million in 2024. Overall, there is some volatility in total assets, with a notable dip in 2022, but a recovery in the two subsequent years.

Return on Assets (ROA)

Both reported and adjusted ROA demonstrate an overall positive trend across the examined years. Reported ROA improved from 8.99% in 2020 to 14.01% in 2021, decreased modestly to 12.25% in 2022, then rebounded to peaks of 15.08% and 14.9% in 2023 and 2024 respectively. Adjusted ROA showed a similar trajectory but at slightly higher levels, starting at 9.49% in 2020, increasing to 14.77% in 2021, easing to 13.0% in 2022, then elevating further to 15.95% in 2023 and 15.8% in 2024. This consistent improvement after 2022 suggests enhanced profitability relative to asset base when adjustments for goodwill are considered.

Insights

The data reveals a pattern of asset base volatility with a dip in 2022, which might reflect divestitures or asset impairments. Despite this, profitability as measured by ROA improved notably over time, highlighting effective utilization of assets, particularly when adjusted for goodwill. The adjusted ROA surpassing reported ROA indicates that goodwill adjustments provide a more favorable view of asset efficiency. The recovery in total assets after 2022, combined with rising adjusted ROA, suggests a strengthening operational performance and asset management in the most recent years.