Stock Analysis on Net
Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

$24.99

Return on Equity (ROE)
since 2005

Microsoft Excel

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Calculation

McDonald’s Corp., ROE, long-term trends, calculation

Microsoft Excel
ROE = 100 × Net income1 ÷ Shareholders’ equity (deficit)1
Dec 31, 2024 = 100 × ÷
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Dec 31, 2005 = 100 × ÷

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

Net Income Trend
Net income exhibits fluctuations over the observed period. Initially, it increased from 2,602 million USD in 2005 to 4,551 million USD in 2009, demonstrating a steady upward trend. Following this, there was moderate growth until 2014, peaking at 5,586 million USD in 2013 before a slight decline to 4,529 million USD in 2015. Starting in 2016, net income began a gradual recovery, reaching a high of 8,469 million USD in 2023, before slightly decreasing to 8,223 million USD in 2024. This suggests overall growth in profitability with some variability in the mid-period.
Shareholders’ Equity (Deficit) Trend
Shareholders' equity showed an initial increase from 15,146 million USD in 2005 to a peak of 16,010 million USD in 2013, indicating strengthening financial stability in that period. However, after 2013, there was a significant decline, turning into a deficit by 2016 with negative equity of -2,204 million USD. This negative trend deepened until 2019, reaching -8,210 million USD, likely reflecting accumulated losses or capital restructuring. A gradual improvement is observed from 2020 onwards, with the deficit narrowing to -3,797 million USD in 2024, signaling partial recovery but still reflecting overall negative equity in recent years.
Return on Equity (ROE) Analysis
ROE values are available for the earlier years only, showing an upward trend from 17.18% in 2005 to a peak of 38.24% in 2011, indicating increasing efficiency in generating earnings from shareholders' equity. The highest ROE of 63.9% in 2014 suggests exceptionally strong profitability relative to equity, potentially influenced by the declining equity base. However, the absence of ROE data after 2014 limits the analysis of recent profitability trends relative to equity.
Overall Insights
The data reveals a complex financial picture characterized by growing net income and a simultaneously deteriorating equity base after 2013. The negative shareholders' equity in recent years implies financial structure challenges that might impact creditworthiness and investor confidence despite increasing net profits. The high ROE figures prior to 2014 could be partially due to shrinking equity, inflating this ratio artificially. The improving net income and narrowing equity deficit in the latest years could indicate ongoing corrective measures or operational improvements, but the company remains in a position requiring close monitoring of its capital structure and equity quality.

Comparison to Competitors

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

Microsoft Excel
McDonald’s Corp. Airbnb Inc. Booking Holdings Inc. Chipotle Mexican Grill Inc. Starbucks Corp.
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
Dec 31, 2016
Dec 31, 2015
Dec 31, 2014
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
Dec 31, 2010
Dec 31, 2009
Dec 31, 2008
Dec 31, 2007
Dec 31, 2006
Dec 31, 2005

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)

McDonald’s Corp., ROE, long-term trends, comparison to sector (consumer services)

Microsoft Excel
McDonald’s Corp. Consumer Services
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
Dec 31, 2016
Dec 31, 2015
Dec 31, 2014
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
Dec 31, 2010
Dec 31, 2009
Dec 31, 2008
Dec 31, 2007
Dec 31, 2006
Dec 31, 2005

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 Industry (Consumer Discretionary)

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

Microsoft Excel
McDonald’s Corp. Consumer Discretionary
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
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Dec 31, 2019
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Dec 31, 2015
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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).