McDonald’s Corp. (NYSE:MCD)

Total assets exhibited fluctuations over the five-year period. Initially decreasing from 2021 to 2022, they subsequently increased through 2023, followed by a slight decrease in 2024, and concluded with a notable increase in 2025. Adjusted total assets mirrored this general pattern, though the magnitude of change differed in certain periods.

Overall Trend

Both total assets and adjusted total assets demonstrate a cyclical pattern. A decline is observed between 2021 and 2022, followed by recovery and growth until 2025. The final year shows the most significant increase for both metrics, suggesting a potential shift in asset composition or investment strategy.

Year-over-Year Changes

From 2021 to 2022, total assets decreased by approximately 6.3%, while adjusted total assets experienced a larger decrease of approximately 10.7%. This suggests that the adjustments made in 2022 had a disproportionately larger impact on the reported asset value.

Between 2022 and 2023, both metrics increased. Total assets grew by 11.3%, and adjusted total assets by 10.8%. The relatively similar percentage increases indicate that the adjustments did not significantly alter the overall growth trend.

A minor decrease in both total assets (1.7%) and adjusted total assets (3.1%) occurred from 2023 to 2024. This suggests a period of consolidation or strategic divestment.

The period from 2024 to 2025 saw the most substantial growth. Total assets increased by 7.9%, while adjusted total assets rose by 8.9%. This indicates renewed investment or acquisition activity.

Difference Between Metrics

A consistent difference exists between total assets and adjusted total assets throughout the period. The adjusted value is consistently lower, indicating that certain assets are being reclassified or written down through the adjustment process. The difference ranges from approximately US$2.357 billion in 2021 to US$3.256 billion in 2025, showing a widening gap over time. This could be due to accumulated adjustments related to intangible assets, goodwill, or other non-current items.

The adjustments to total assets appear to be systematic and ongoing, impacting the reported asset base each year. Further investigation into the nature of these adjustments would be necessary to fully understand their implications for the company’s financial position.

Total liabilities exhibited fluctuations over the five-year period. Initially decreasing from 2021 to 2022, they subsequently increased in 2023, followed by a slight decrease in 2024, and then increased again in 2025. Adjusted total liabilities mirrored this pattern, though the magnitudes of change differed.

Overall Trend

Both total liabilities and adjusted total liabilities demonstrate a generally stable range between approximately US$53.7 billion and US$61.3 billion. While there isn’t a consistent upward or downward trajectory, a slight increasing trend is observable when comparing the beginning and end of the period.

Year-over-Year Changes

A decrease in total liabilities of US$2.02 billion, or approximately 3.5%, was observed from 2021 to 2022. This was followed by an increase of US$4.41 billion, or roughly 7.8%, from 2022 to 2023. The period from 2023 to 2024 saw a decrease of US$1.87 billion, or about 3.1%, and finally, an increase of US$2.32 billion, or approximately 4.0%, from 2024 to 2025.

Adjustments Impact

The difference between total liabilities and adjusted total liabilities remained relatively consistent throughout the period, ranging from approximately US$2.8 billion to US$3.5 billion. This suggests a systematic adjustment being applied to the reported liabilities. The adjustments decreased the reported liabilities in each year, indicating the presence of items being reclassified or otherwise modified in the adjusted figures.

Magnitude of Fluctuations

The largest year-over-year change in total liabilities occurred between 2022 and 2023, with an increase of US$4.41 billion. The largest year-over-year change in adjusted total liabilities also occurred between 2022 and 2023, with an increase of US$4.69 billion. These increases suggest potentially significant events impacting the liability structure during that year.

In summary, the liability position experienced moderate fluctuations over the observed period, with adjustments consistently reducing the reported total. The year 2023 appears to have been a period of notable change in both reported and adjusted liabilities.

Shareholders’ equity and adjusted shareholders’ equity both demonstrate significant fluctuations over the five-year period. Initially, both metrics reflect a deficit position, and while both show improvement towards the end of the period, the magnitude and pattern of change differ.

Overall Trend in Shareholders’ Equity

Shareholders’ equity begins at a deficit of US$4,601 million in 2021, decreases to a larger deficit of US$6,003 million in 2022, then begins a recovery, reaching a deficit of US$1,791 million by 2025. The largest single-year improvement occurs between 2024 and 2025, with a reduction in the deficit of US$1,727 million.

Overall Trend in Adjusted Shareholders’ Equity

Adjusted shareholders’ equity follows a similar pattern to shareholders’ equity, starting at a deficit of US$4,144 million in 2021. It declines to a deficit of US$5,725 million in 2022, and then exhibits a gradual improvement, ending at a deficit of US$3,064 million in 2025. The largest single-year improvement in adjusted shareholders’ equity is observed between 2023 and 2024, with a reduction in the deficit of US$1,111 million.

Comparison of Shareholders’ Equity and Adjusted Shareholders’ Equity

The difference between shareholders’ equity and adjusted shareholders’ equity remains relatively consistent throughout the period, generally ranging between US$450 million and US$500 million. This suggests that the adjustments being made to shareholders’ equity are systematic and do not dramatically alter the overall equity position. The adjusted figures are consistently less negative than the reported shareholders’ equity, indicating that the adjustments generally increase the equity value.

The period between 2022 and 2025 demonstrates a clear trend of improving equity positions for both reported and adjusted shareholders’ equity. However, the rate of improvement differs, with the most substantial gains occurring in the final year of the observed period.

An examination of the financial information reveals notable shifts in the reported and adjusted capitalization structure over the five-year period. Total reported debt consistently increased from 2021 to 2023, peaking at US$40,921 million, before experiencing a slight decrease in 2024 and a further increase in 2025. Shareholders’ equity, initially a deficit, demonstrated a decreasing negative balance throughout the period, indicating an improvement in the equity position, though it remained negative through 2025. Consequently, total reported capital also increased over the period, mirroring the trend in reported debt.

Significant differences emerge when considering the adjusted figures. Adjusted total debt consistently exceeds reported total debt, and also exhibits an overall increasing trend, rising from US$49,349 million in 2021 to US$54,813 million in 2025. Adjusted shareholders’ equity, while also a deficit, follows a similar pattern to the reported equity, showing a diminishing negative balance over time. Adjusted total capital demonstrates a more volatile pattern than its reported counterpart, with a decrease in 2022, followed by increases in subsequent years, ultimately reaching US$51,749 million in 2025.

Debt Trends

Reported debt increased by approximately 10.1% between 2021 and 2023, then decreased by 1.8% in 2024, and increased again by 5.2% in 2025. Adjusted debt shows a more consistent upward trend, increasing by approximately 11.1% over the entire five-year period. The divergence between reported and adjusted debt suggests the presence of off-balance sheet financing or other adjustments impacting the true debt obligations.

Equity Trends

Reported shareholders’ equity improved from a deficit of US$4,601 million in 2021 to a deficit of US$1,791 million in 2025, representing a substantial reduction in the negative equity position. The adjusted shareholders’ equity also improved, but at a slower rate, moving from a deficit of US$4,144 million to US$3,064 million. The difference between reported and adjusted equity suggests potential adjustments related to accumulated other comprehensive income or unrealized gains/losses.

Capital Structure Changes

Total reported capital increased by approximately 17.1% over the period, while adjusted total capital increased by approximately 14.2%. The adjusted capital figure experienced a decrease in 2022, which is not mirrored in the reported capital, indicating a significant adjustment impacting the overall capital base in that year. The consistent difference between reported and adjusted capital highlights the impact of the adjustments made to debt and equity on the overall capitalization structure.

The increasing adjusted debt levels, coupled with the persistent equity deficits, warrant further investigation. The adjustments made to both debt and equity suggest a more complex financial picture than what is initially presented in the reported financial statements. The trend of improving equity, while positive, is less pronounced in the adjusted figures, indicating that the reported improvement may be partially attributable to accounting adjustments.

Revenues and adjusted revenues exhibit similar upward trends over the five-year period. While both metrics initially show a slight decrease from 2021 to 2022, they subsequently demonstrate consistent growth through 2025. The difference between reported revenues and adjusted revenues remains relatively stable across the observed timeframe.

Overall Trend

Both revenue streams experienced a minor contraction between 2021 and 2022, decreasing from US$23,223 million and US$23,259 million respectively, to US$23,183 million and US$23,202 million. Following this, a clear positive trajectory emerges, with revenues reaching US$25,494 million and adjusted revenues reaching US$25,526 million in 2023. This growth continues into 2024, with revenues at US$25,920 million and adjusted revenues at US$25,908 million, and further accelerates in 2025, culminating in revenues of US$26,885 million and adjusted revenues of US$27,052 million.

Revenue vs. Adjusted Revenue

The difference between revenues and adjusted revenues is consistently around US$36 million in 2021 and 2022. This difference narrows to approximately US$32 million in 2023, then widens slightly to around US$12 million in 2024, and finally expands to US$167 million in 2025. This suggests that the nature or magnitude of adjustments to revenue may be changing over time, with a more substantial adjustment occurring in the final year of the period.

Growth Rates

The period between 2022 and 2023 shows the most significant growth, with both revenue streams increasing by approximately 10.8%. The growth rate slows somewhat between 2023 and 2024, at approximately 1.6%, but accelerates again between 2024 and 2025, reaching approximately 3.7%. This indicates a potential acceleration in the rate of revenue expansion in the most recent year.

Reported net income exhibited fluctuations over the five-year period, while adjusted net income demonstrated a similar pattern, consistently remaining below reported net income each year. A review of the figures reveals distinct trends in both metrics.

Overall Trend

Net income decreased from US$7,545 million in 2021 to US$6,177 million in 2022, representing a notable decline. It then recovered, increasing to US$8,469 million in 2023, followed by a slight decrease to US$8,223 million in 2024, and concluding with an increase to US$8,563 million in 2025. Adjusted net income mirrored this trend, declining from US$7,166 million in 2021 to US$5,938 million in 2022, recovering to US$7,845 million in 2023, decreasing to US$7,541 million in 2024, and increasing to US$8,743 million in 2025.

Relationship Between Metrics

The difference between reported net income and adjusted net income remained relatively consistent throughout the period. In each year, adjustments resulted in a lower net income figure. The magnitude of the adjustment ranged from approximately US$379 million in 2021 to US$212 million in 2025. This suggests the presence of recurring items that are excluded from the adjusted figure.

Growth Rates

From 2021 to 2025, reported net income grew at a compound annual growth rate (CAGR) of approximately 2.4%. Adjusted net income exhibited a slightly higher CAGR of approximately 3.2% over the same period. The higher growth rate in adjusted net income suggests that the items being adjusted for had a disproportionately negative impact in earlier years.

Recent Performance

The most recent year, 2025, shows an increase in both reported and adjusted net income compared to 2024. Adjusted net income experienced a more substantial increase than reported net income, closing the gap between the two metrics slightly. This could indicate a change in the nature or magnitude of the adjustments being made.

The consistent application of adjustments to net income warrants further investigation to understand the nature of these items and their impact on the company’s underlying profitability. The increasing trend in adjusted net income suggests a potential improvement in core business performance.