Stock Analysis on Net
Stock Analysis on Net
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McDonald’s Corp. (NYSE:MCD)

Adjusted Financial Ratios

Advanced level


Adjusted Financial Ratios (Summary)

McDonald’s Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Activity Ratio
Total Asset Turnover
Reported 0.44 0.64 0.68 0.79 0.67
Adjusted 0.46 0.52 0.54 0.61 0.54
Liquidity Ratio
Current Ratio
Reported 0.98 1.36 1.84 1.40 3.27
Adjusted 0.98 1.36 1.84 1.33 3.27
Solvency Ratios
Debt to Equity
Reported 3.40
Adjusted 4.14
Debt to Capital
Reported 1.32 1.25 1.12 1.09 0.77
Adjusted 1.18 1.16 1.08 1.04 0.81
Financial Leverage
Reported 5.35
Adjusted 5.75
Profitability Ratios
Net Profit Margin
Reported 28.59% 28.18% 22.75% 19.03% 17.82%
Adjusted 30.01% 28.74% 26.60% 15.98% 12.47%
Return on Equity (ROE)
Reported 63.90%
Adjusted 38.35%
Return on Assets (ROA)
Reported 12.68% 18.06% 15.36% 15.11% 11.94%
Adjusted 13.66% 14.99% 14.25% 9.76% 6.67%

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McDonald’s Corp.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. McDonald’s Corp.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity.
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. McDonald’s Corp.’s adjusted debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. McDonald’s Corp.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McDonald’s Corp.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

McDonald’s Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Revenues 21,076,500  21,025,200  22,820,400  24,621,900  25,413,000 
Total assets 47,510,800  32,811,200  33,803,700  31,023,900  37,938,700 
Activity Ratio
Total asset turnover1 0.44 0.64 0.68 0.79 0.67
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted revenues2 21,109,300  21,653,000  22,820,400  24,621,900  25,413,000 
Adjusted total assets3 46,371,900  41,530,624  42,609,156  40,313,170  47,490,619 
Activity Ratio
Adjusted total asset turnover4 0.46 0.52 0.54 0.61 0.54

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Total asset turnover = Revenues ÷ Total assets
= 21,076,500 ÷ 47,510,800 = 0.44

2 Adjusted revenues. See details »

3 Adjusted total assets. See details »

4 2019 Calculation
Adjusted total asset turnover = Adjusted revenues ÷ Adjusted total assets
= 21,109,300 ÷ 46,371,900 = 0.46

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. McDonald’s Corp.’s adjusted total asset turnover ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Current assets 3,557,900  4,053,200  5,327,200  4,848,600  9,643,000 
Current liabilities 3,621,000  2,973,500  2,890,600  3,468,300  2,950,400 
Liquidity Ratio
Current ratio1 0.98 1.36 1.84 1.40 3.27
Adjusted
Selected Financial Data (US$ in thousands)
Current assets 3,557,900  4,053,200  5,327,200  4,848,600  9,643,000 
Adjusted current liabilities2 3,621,000  2,973,500  2,890,600  3,653,900  2,950,400 
Liquidity Ratio
Adjusted current ratio3 0.98 1.36 1.84 1.33 3.27

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Current ratio = Current assets ÷ Current liabilities
= 3,557,900 ÷ 3,621,000 = 0.98

2 Adjusted current liabilities. See details »

3 2019 Calculation
Adjusted current ratio = Current assets ÷ Adjusted current liabilities
= 3,557,900 ÷ 3,621,000 = 0.98

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. McDonald’s Corp.’s adjusted current ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total debt 34,177,200  31,075,300  29,536,400  25,955,700  24,122,100 
Shareholders’ equity (deficit) (8,210,300) (6,258,400) (3,268,000) (2,204,300) 7,087,900 
Solvency Ratio
Debt to equity1 3.40
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 47,556,000  41,014,124  39,209,756  36,048,970  34,206,819 
Adjusted shareholders’ equity (deficit)3 (7,370,500) (5,634,500) (3,016,500) (1,376,800) 8,259,400 
Solvency Ratio
Adjusted debt to equity4 4.14

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity (deficit)
= 34,177,200 ÷ -8,210,300 =

2 Adjusted total debt. See details »

3 Adjusted shareholders’ equity (deficit). See details »

4 2019 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted shareholders’ equity (deficit)
= 47,556,000 ÷ -7,370,500 =

Solvency ratio Description The company
Adjusted debt-to-equity ratio A solvency ratio calculated as adjusted total debt divided by adjusted total equity.

Adjusted Debt to Capital

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total debt 34,177,200  31,075,300  29,536,400  25,955,700  24,122,100 
Total capital 25,966,900  24,816,900  26,268,400  23,751,400  31,210,000 
Solvency Ratio
Debt to capital1 1.32 1.25 1.12 1.09 0.77
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total debt2 47,556,000  41,014,124  39,209,756  36,048,970  34,206,819 
Adjusted total capital3 40,185,500  35,379,624  36,193,256  34,672,170  42,466,219 
Solvency Ratio
Adjusted debt to capital4 1.18 1.16 1.08 1.04 0.81

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 34,177,200 ÷ 25,966,900 = 1.32

2 Adjusted total debt. See details »

3 Adjusted total capital. See details »

4 2019 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 47,556,000 ÷ 40,185,500 = 1.18

Solvency ratio Description The company
Adjusted debt-to-capital ratio A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity. McDonald’s Corp.’s adjusted debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Total assets 47,510,800  32,811,200  33,803,700  31,023,900  37,938,700 
Shareholders’ equity (deficit) (8,210,300) (6,258,400) (3,268,000) (2,204,300) 7,087,900 
Solvency Ratio
Financial leverage1 5.35
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted total assets2 46,371,900  41,530,624  42,609,156  40,313,170  47,490,619 
Adjusted shareholders’ equity (deficit)3 (7,370,500) (5,634,500) (3,016,500) (1,376,800) 8,259,400 
Solvency Ratio
Adjusted financial leverage4 5.75

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 47,510,800 ÷ -8,210,300 =

2 Adjusted total assets. See details »

3 Adjusted shareholders’ equity (deficit). See details »

4 2019 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity (deficit)
= 46,371,900 ÷ -7,370,500 =

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income 6,025,400  5,924,300  5,192,300  4,686,500  4,529,300 
Revenues 21,076,500  21,025,200  22,820,400  24,621,900  25,413,000 
Profitability Ratio
Net profit margin1 28.59% 28.18% 22.75% 19.03% 17.82%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income2 6,334,700  6,223,600  6,070,400  3,934,800  3,167,800 
Adjusted revenues3 21,109,300  21,653,000  22,820,400  24,621,900  25,413,000 
Profitability Ratio
Adjusted net profit margin4 30.01% 28.74% 26.60% 15.98% 12.47%

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 6,025,400 ÷ 21,076,500 = 28.59%

2 Adjusted net income. See details »

3 Adjusted revenues. See details »

4 2019 Calculation
Adjusted net profit margin = 100 × Adjusted net income ÷ Adjusted revenues
= 100 × 6,334,700 ÷ 21,109,300 = 30.01%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. McDonald’s Corp.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income 6,025,400  5,924,300  5,192,300  4,686,500  4,529,300 
Shareholders’ equity (deficit) (8,210,300) (6,258,400) (3,268,000) (2,204,300) 7,087,900 
Profitability Ratio
ROE1 63.90%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income2 6,334,700  6,223,600  6,070,400  3,934,800  3,167,800 
Adjusted shareholders’ equity (deficit)3 (7,370,500) (5,634,500) (3,016,500) (1,376,800) 8,259,400 
Profitability Ratio
Adjusted ROE4 38.35%

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity (deficit)
= 100 × 6,025,400 ÷ -8,210,300 =

2 Adjusted net income. See details »

3 Adjusted shareholders’ equity (deficit). See details »

4 2019 Calculation
Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity (deficit)
= 100 × 6,334,700 ÷ -7,370,500 =

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted total equity.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Reported
Selected Financial Data (US$ in thousands)
Net income 6,025,400  5,924,300  5,192,300  4,686,500  4,529,300 
Total assets 47,510,800  32,811,200  33,803,700  31,023,900  37,938,700 
Profitability Ratio
ROA1 12.68% 18.06% 15.36% 15.11% 11.94%
Adjusted
Selected Financial Data (US$ in thousands)
Adjusted net income2 6,334,700  6,223,600  6,070,400  3,934,800  3,167,800 
Adjusted total assets3 46,371,900  41,530,624  42,609,156  40,313,170  47,490,619 
Profitability Ratio
Adjusted ROA4 13.66% 14.99% 14.25% 9.76% 6.67%

Based on: 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25).

1 2019 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 6,025,400 ÷ 47,510,800 = 12.68%

2 Adjusted net income. See details »

3 Adjusted total assets. See details »

4 2019 Calculation
Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 6,334,700 ÷ 46,371,900 = 13.66%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. McDonald’s Corp.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.