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Microsoft Excel LibreOffice Calc

McDonald’s Corp. (MCD)


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Property and equipment are stated at cost, with depreciation and amortization provided using the straight-line method over the following estimated useful lives: buildings–up to 40 years; leasehold improvements–the lesser of useful lives of assets or lease terms, which generally include certain option periods; and equipment–3 to 12 years.

Source: 10-K (filing date: 2019-02-22).


Property, Plant and Equipment Disclosure

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

US$ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Land hidden hidden hidden hidden hidden
Buildings and improvements on owned land hidden hidden hidden hidden hidden
Buildings and improvements on leased land hidden hidden hidden hidden hidden
Equipment, signs and seating hidden hidden hidden hidden hidden
Other hidden hidden hidden hidden hidden
Property and equipment, at cost hidden hidden hidden hidden hidden
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Net property and equipment hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

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.’s property and equipment, at cost increased from 2016 to 2017 and from 2017 to 2018.
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.’s net property and equipment increased from 2016 to 2017 and from 2017 to 2018.

Property, Plant and Equipment Ratios (Summary)

McDonald’s Corp., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Average age hidden hidden hidden hidden hidden
Estimated total useful life (years) hidden hidden hidden hidden hidden
Estimated age, time elapsed since purchase (years) hidden hidden hidden hidden hidden
Estimated remaining life (years) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

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’s fixed asset base is old or new. Newer assets are likely to be more efficient. McDonald’s Corp.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. McDonald’s Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. McDonald’s Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Estimated remaining life McDonald’s Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Average Age

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Property and equipment, at cost hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Ratio
Average age1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, at cost – Land)
= 100 × hidden ÷ (hiddenhidden) = hidden

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’s fixed asset base is old or new. Newer assets are likely to be more efficient. McDonald’s Corp.’s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Property and equipment, at cost hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation and amortization expense for property and equipment hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Estimated total useful life (years) = (Property and equipment, at cost – Land) ÷ Depreciation and amortization expense for property and equipment
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. McDonald’s Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden
Depreciation and amortization expense for property and equipment hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense for property and equipment
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. McDonald’s Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in thousands)
Net property and equipment hidden hidden hidden hidden hidden
Land hidden hidden hidden hidden hidden
Depreciation and amortization expense for property and equipment hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

2018 Calculations

1 Estimated remaining life (years) = (Net property and equipment – Land) ÷ Depreciation and amortization expense for property and equipment
= (hiddenhidden) ÷ hidden = hidden

Ratio Description The company
Estimated remaining life McDonald’s Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2016 to 2017 but then slightly declined from 2017 to 2018.