Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

$24.99

Debt to Equity
since 2005

Microsoft Excel

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Calculation

McDonald’s Corp., debt to equity, long-term trends, calculation

Microsoft Excel

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

1 US$ in millions


Total Debt
The total debt demonstrates an overall upward trend from 2005 through 2024. Starting at approximately $10.1 billion in 2005, the debt level initially showed moderate increases and some fluctuations until 2010, when it was around $11.5 billion. From 2010 onward, a more pronounced escalation in debt is evident, reaching a peak above $39 billion around 2023. There was a slight dip in debt levels from 2023 to 2024, but the general trajectory over the two decades is clearly increasing, reflecting a considerable growth in the company's financial leverage.
Shareholders’ Equity (Deficit)
Shareholders’ equity presents a contrasting trend to total debt. In the early years from 2005 to 2009, equity remained relatively stable, fluctuating between approximately $13.4 billion and $16 billion. However, starting around 2010, a marked decline in equity values is observed, passing into negative territory by 2016. This negative equity position worsens, reaching a deficit of about $8.2 billion in 2019. Post-2019, the deficit fluctuates but remains negative through 2024. This persistent negative equity indicates that liabilities have exceeded assets significantly in recent years.
Debt to Equity Ratio
Data for the debt to equity ratio are available from 2005 to 2010. During this period, the ratio rose from 0.67 to approximately 0.79, showing a gradual increase in leverage. By 2010, the ratio was near 0.8, indicating total debt was about 80% of equity. From 2011 onward, the ratio data are not provided, likely because the shareholders' equity became negative, making the ratio calculation less meaningful or undefined. Given the trends in debt and equity, it can be inferred that the leverage has increased substantially, with equity deficits contributing to a very high or undefined debt to equity ratio post-2010.
Summary of Financial Position Trends
Over the analyzed period, the company’s financial structure shifted significantly towards higher leverage. Total debt has increased more than threefold from 2005 to 2024, while shareholders’ equity has deteriorated, turning negative from 2016 onwards. This combination reflects an increased reliance on borrowed funds and a weakened equity base. The negative equity trend raises concerns about solvency and financial stability, indicating that liabilities have grown to exceed the company's assets. The absence of debt to equity ratio data beyond 2010 aligns with the transition into negative equity territory, emphasizing the challenges in maintaining a balanced capital structure.

Comparison to Competitors

McDonald’s Corp., debt to equity, long-term trends, comparison to competitors

Microsoft Excel

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).


Comparison to Sector (Consumer Services)


Comparison to Industry (Consumer Discretionary)

McDonald’s Corp., debt to equity, long-term trends, comparison to industry (consumer discretionary)

Microsoft Excel

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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).