Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

McDonald’s Corp., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Short-term borrowings and current maturities of long-term debt	—)	—)	2,192)	—)	—)
Accounts payable	1,149)	1,029)	1,103)	980)	1,007)
Current operating lease liability	671)	625)	643)	640)	706)
Current finance lease liability	23)	11)	46)	22)	—)
Current lease liability	694)	636)	688)	661)	706)
Income taxes	250)	361)	705)	275)	361)
Other taxes	247)	224)	268)	255)	237)
Accrued interest	533)	482)	469)	393)	363)
Accrued payroll and other liabilities	1,488)	1,129)	1,434)	1,237)	1,347)
Current liabilities	4,361)	3,861)	6,859)	3,802)	4,020)
Long-term debt, excluding current maturities	39,973)	38,424)	37,153)	35,904)	35,623)
Long-term operating lease liability	11,817)	11,118)	11,528)	10,834)	13,021)
Long-term finance lease liability	2,329)	1,770)	1,530)	1,300)	—)
Long-term lease liability	14,146)	12,888)	13,058)	12,134)	13,021)
Long-term income taxes	139)	344)	363)	792)	1,897)
Deferred revenues, initial franchise fees	945)	778)	790)	758)	738)
Other long-term liabilities	704)	771)	950)	1,052)	1,081)
Deferred income taxes	1,038)	1,914)	1,681)	1,998)	2,076)
Long-term liabilities	56,945)	55,119)	53,995)	52,637)	54,435)
Total liabilities	61,306)	58,980)	60,854)	56,439)	58,455)
Preferred stock, no par value; issued: none	—)	—)	—)	—)	—)
Common stock, $.01 par value	17)	17)	17)	17)	17)
Additional paid-in capital	9,641)	9,281)	8,893)	8,547)	8,232)
Retained earnings	70,282)	66,834)	63,480)	59,544)	57,535)
Accumulated other comprehensive loss	(2,414)	(2,553)	(2,456)	(2,487)	(2,574)
Common stock in treasury, at cost	(79,317)	(77,376)	(74,640)	(71,624)	(67,810)
Shareholders’ equity (deficit)	(1,791)	(3,797)	(4,707)	(6,003)	(4,601)
Total liabilities and shareholders’ equity (deficit)	59,515)	55,183)	56,147)	50,436)	53,854)

Based on: 10-K (reporting date: 2025-12-31), 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).

The company’s liabilities demonstrate a generally increasing trend over the five-year period, while stockholders’ equity exhibits a volatile pattern, transitioning from a deficit to a smaller deficit. Total liabilities increased from US$58.455 billion in 2021 to US$61.306 billion in 2025, with a slight dip in 2024. Stockholders’ equity, however, moved from a deficit of US$4.601 billion in 2021 to a deficit of US$1.791 billion in 2025, indicating some improvement in the equity position, though it remains negative.

Current Liabilities: Current liabilities experienced a significant increase in 2023, rising to US$6.859 billion from US$3.802 billion in 2022, before decreasing to US$4.361 billion in 2025. This 2023 surge was largely driven by a substantial increase in income taxes payable. Accounts payable remained relatively stable, fluctuating between US$980 million and US$1,149 million. Accrued payroll and other liabilities also showed an increasing trend, reaching US$1.488 billion in 2025.
Long-Term Liabilities: Long-term liabilities generally increased over the period, moving from US$54.435 billion in 2021 to US$56.945 billion in 2025. Long-term debt, excluding current maturities, consistently increased, reaching US$39.973 billion in 2025. Long-term lease liabilities also showed an upward trend, with both operating and finance lease liabilities contributing to this increase. Deferred income taxes decreased significantly from 2021 to 2025.
Stockholders’ Equity Components: Retained earnings consistently increased throughout the period, rising from US$57.535 billion in 2021 to US$70.282 billion in 2025. However, this increase was offset by a substantial and growing negative balance in common stock in treasury, which expanded from US$67.810 billion in 2021 to US$79.317 billion in 2025. Accumulated other comprehensive loss remained relatively stable, fluctuating around -US$2.5 billion. Additional paid-in capital also increased steadily.
Lease Liabilities: Both current and long-term lease liabilities increased over the period. The company’s adoption and ongoing application of lease accounting standards appear to be reflected in the significant values reported for these liabilities. Finance lease liabilities, while initially small, grew substantially, particularly in the long-term category, reaching US$2.329 billion in 2025.
Tax Liabilities: Income taxes payable exhibited significant volatility. A large increase was observed in 2023, followed by decreases in 2024 and 2025. Other taxes payable remained relatively stable. Long-term income taxes decreased considerably from US$1.897 billion in 2021 to US$139 million in 2025.

Overall, the company relies heavily on liabilities to finance its operations. While stockholders’ equity has improved from a deficit perspective, it remains negative, and the significant treasury stock balance continues to exert a downward pressure on the equity position. The increasing trend in long-term debt and lease liabilities suggests a continued reliance on external financing.

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McDonald’s Corp. (NYSE:MCD)

Balance Sheet: Liabilities and Stockholders’ Equity