Stock Analysis on Net
Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

Common-Size Income Statement 

McDonald’s Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenues from franchised restaurants 60.63 60.55 60.85 56.35 55.84
Sales by Company-operated restaurants 37.74 38.21 37.74 42.15 42.37
Other revenues 1.63 1.24 1.42 1.51 1.78
Revenues 100.00% 100.00% 100.00% 100.00% 100.00%
Franchised restaurants, occupancy expenses -9.78 -9.71 -10.14 -10.05 -11.49
Food & paper -11.55 -11.92 -11.81 -13.34 -13.35
Payroll & employee benefits -11.42 -11.32 -11.29 -11.53 -12.58
Occupancy & other operating expenses -9.19 -9.02 -8.74 -9.79 -10.42
Company-operated restaurant expenses -32.16% -32.26% -31.84% -34.65% -36.35%
Other restaurant expenses -1.31 -0.91 -1.06 -1.12 -1.39
Gross margin 56.75% 57.12% 56.97% 54.17% 50.77%
Depreciation and amortization -1.72 -1.50 -1.60 -1.42 -1.56
Other -9.31 -9.55 -10.75 -10.24 -11.69
Selling, general & administrative expenses -11.03% -11.05% -12.35% -11.66% -13.25%
Gains on sales of restaurant businesses 0.36 0.40 0.26 0.42 0.12
Equity in earnings of unconsolidated affiliates 0.61 0.60 0.49 0.76 0.61
Asset dispositions and other income (expense), net -0.39 0.03 -0.59 -0.32 -1.51
Impairment and other gains (charges), net -1.12 -1.42 -4.36 1.23 1.39
Other operating income (expense), net -0.54% -0.39% -4.20% 2.08% 0.61%
Operating income 45.19% 45.68% 40.42% 44.59% 38.13%
Interest expense, net of capitalized interest -5.81 -5.34 -5.21 -5.11 -6.34
Nonoperating income (expense), net 0.54 0.93 -1.46 -0.18 0.18
Income before provision for income taxes 39.91% 41.27% 33.76% 39.31% 31.97%
Provision for income taxes -8.19 -8.05 -7.11 -6.82 -7.34
Net income 31.72% 33.22% 26.65% 32.49% 24.63%

Based on: 10-K (reporting date: 2024-12-31), 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).

The financial data reveals several notable trends over the period analyzed. The proportion of revenues from franchised restaurants has increased, rising from 55.84% in 2020 to around 60.6% by 2024, indicating continued growth or emphasis on the franchising business segment. Conversely, sales by company-operated restaurants have declined from 42.37% in 2020 to approximately 37.7% in 2024, signaling a shift in revenue composition perhaps due to strategic focus or operational changes. Other revenues have remained relatively stable, with minor fluctuations between 1.24% and 1.78% of total revenues.

Cost structure analysis shows a general trend of decreasing occupancy expenses related to franchised restaurants, from -11.49% down to around -9.78%, which may suggest improved efficiency or better cost management. The costs for food and paper, as well as payroll and employee benefits, have also decreased from around -13.35% to -11.55% and -12.58% to -11.42%, respectively, over the period, which could be reflective of operational efficiencies or cost-saving initiatives. Occupancy and other operating expenses show a steady downward trend from -10.42% to approximately -9.19%.

Company-operated restaurant expenses have notably decreased from -36.35% to around -32.16%, pointing toward improved cost management or operational efficiency within this segment. Other restaurant expenses have generally been low and stable, though with a slight uptick toward -1.31% in 2024.

Gross margin has improved significantly, increasing from 50.77% in 2020 to 56.75% in 2024, illustrating enhanced profitability from core operations. Depreciation and amortization as a percentage of revenues fluctuated mildly, generally staying close to around -1.5%. Other operating expenses and selling, general & administrative expenses have decreased, contributing positively to operating results.

There is some volatility in gains on sales of restaurant businesses, with values ranging between 0.12% and 0.42%. Equity earnings of unconsolidated affiliates remained relatively stable around 0.5% to 0.7%. Asset dispositions and impairment charges showed fluctuations, with impairment and other charges exhibiting negative values during some years, which could reflect asset write-downs or restructuring costs.

Operating income as a percentage of revenues increased from 38.13% in 2020 to peaks above 45% in 2023 and 2024, underscoring improved operational profitability. Interest expense as a percentage of revenues declined from -6.34% to -5.81%, reflecting potentially better financing terms or lower debt levels relatively to revenue. Nonoperating income/expense showed some variability but stayed close to neutral in recent years.

Income before taxes and net income margins show strong growth, with net income margin rising from 24.63% in 2020 to over 31% in 2024. The provision for income taxes has marginally increased as a percentage of revenues toward -8.19%. Overall, the data indicates enhanced profitability and efficiency with a shift in revenue sources toward franchised restaurants and improved cost controls across multiple expense categories.