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’ deficit	(1,791)	(3,797)	(4,707)	(6,003)	(4,601)
Total liabilities and shareholders’ 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 balance sheet reflects a capital structure characterized by significant long-term leverage and a persistent shareholders' deficit. Total liabilities have exhibited a gradual upward trend, increasing from 58,455 million US dollars in 2021 to 61,306 million US dollars by 2025. This growth is primarily driven by a steady rise in long-term debt and lease obligations, despite fluctuations in short-term liabilities.

Current Liabilities and Short-Term Obligations: Current liabilities remained relatively stable between 3,802 million and 4,361 million US dollars, with a notable exception in 2023 when they spiked to 6,859 million US dollars. This anomaly was driven by the emergence of 2,192 million US dollars in short-term borrowings and current maturities of long-term debt, which were absent in other reported years. Accounts payable and accrued payroll showed a general upward trajectory toward 2025, suggesting an increase in operational obligations.
Long-Term Debt and Lease Liabilities: Long-term debt, excluding current maturities, demonstrated consistent growth over the five-year period, rising from 35,623 million US dollars in 2021 to 39,973 million US dollars in 2025. Total long-term lease liabilities also increased from 13,021 million US dollars to 14,146 million US dollars, with a specific increase in long-term finance lease liabilities, which grew from zero in 2021 to 2,329 million US dollars in 2025. This indicates a strategic shift or expansion in leased assets and a reliance on long-term borrowing to fund operations.
Shareholders' Equity and Treasury Stock: A persistent shareholders' deficit is observed throughout the period, although the deficit narrowed from 4,601 million US dollars in 2021 to 1,791 million US dollars in 2025. This deficit is largely the result of an aggressive treasury stock program; the cost of common stock in treasury increased from 67,810 million US dollars in 2021 to 79,317 million US dollars in 2025. This indicates significant capital return to shareholders via share buybacks, which has historically outweighed the growth in retained earnings.
Retained Earnings and Capital Growth: Retained earnings showed strong and consistent growth, increasing from 57,535 million US dollars in 2021 to 70,282 million US dollars in 2025. This upward trend reflects sustained profitability. However, the pace of accumulation in retained earnings has been largely offset by the increase in treasury stock, maintaining the overall negative equity position while slowly reducing the total deficit.

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McDonald’s Corp. (NYSE:MCD)

Balance Sheet: Liabilities and Stockholders’ Equity