McDonald’s Corp. (NYSE:MCD)

Analysis of the available quarterly financial data reveals notable trends in the company's Return on Assets (ROA) from March 2021 through September 2025. The ROA demonstrates an overall positive trajectory with some fluctuations throughout the observed periods.

Return on Assets (ROA)

The ROA began at 10.1% in the first quarter of 2021 and experienced a significant increase in the following quarter to 13.29%, continuing to rise to 14.01% by the end of 2021. In early 2022, the ROA slightly declined to 12.35% in the middle of the year but regained strength, peaking at 16.06% in the first quarter of 2024.

Subsequent quarters show a mild downward trend after the peak, with the ROA moving from 15.44% in the second quarter of 2024 to 13.89% by the third quarter of 2025. Despite this decline, the ROA remains substantially higher than at the start of the period under review.

This pattern indicates that the company has generally improved its efficiency in generating profit from its assets over time, although recent quarters suggest a stabilization or slight decrease in this efficiency metric.

Financial Leverage

No data is available to assess financial leverage, thus limiting insights into the company’s use of debt relative to equity or assets during the reviewed time frame.

Return on Equity (ROE)

Return on Equity figures are not available, restricting the ability to evaluate shareholder return or effectiveness in generating profits from equity investments.

In summary, the company's ROA trend points to improved asset utilization efficiency across most quarters, particularly notable from mid-2021 through early 2024. However, the absence of financial leverage and ROE data constrains a comprehensive analysis of the company’s overall financial leverage strategy and equity returns.

The analysis of the quarterly financial metrics over the observed periods reveals several noteworthy trends related to profitability and operational efficiency.

Net Profit Margin

The net profit margin exhibits fluctuations with an initial upward trend from 26.31% in the first quarter of 2021 to a peak of approximately 32.49% by the end of 2021. This is followed by a decline through the first half of 2022, reaching a low near 25.41% in the third quarter of 2022. Subsequently, the margin recovers and stabilizes around 33% from early 2023 through mid-2024, before experiencing a mild downward adjustment towards approximately 32% by late 2025. Overall, the net profit margin demonstrates a cyclical pattern but maintains a relatively strong profitability level above 25% throughout the period.

Asset Turnover

The asset turnover ratio shows a general improvement from 0.38 at the start of 2021, rising steadily to 0.48 by mid-2022. This suggests increasing efficiency in generating revenue from assets during this period. Following this peak, the ratio experiences some volatility, oscillating between 0.43 and 0.48 through to late 2025. The decreasing trend observed in the latter quarters indicates a slight reduction in asset utilization efficiency. Nonetheless, the overall level remains near or above the initial values, indicating sustained operational efficiency.

Financial Leverage and Return on Equity (ROE)

Data for financial leverage and return on equity is not available for analysis, limiting the assessment of the company’s capital structure impact on returns and comprehensive profitability evaluation.

In summary, the financial data indicates that profitability, as measured by net profit margin, shows resilience with periodic fluctuations but tends to revert to a higher profitability range after dips. Asset turnover reflects an initial increase in asset utilization efficiency, followed by some volatility and a slight reduction towards the end of the observed timeline. The absence of financial leverage and ROE data restricts a full assessment of the company's financial dynamics, particularly the interplay between leverage, asset efficiency, and equity returns.

Tax Burden

The tax burden ratio remained relatively stable over the observed periods, fluctuating between 0.78 and 0.83. No significant upward or downward trend is evident, indicating a consistent effective tax rate impacting net income over time.

Interest Burden

The interest burden ratio showed modest variation, ranging from 0.84 to 0.89. This suggests a generally stable interest expense relative to operating profit, with a slight improvement around mid-2023 reflected in higher ratios close to 0.89, indicating reduced interest expense burden during that period.

EBIT Margin

EBIT margin exhibited considerable variation across quarters. Initial quarters in 2021 saw margins in the low 40s percentage, peaking in Q3 and Q4 2021 above 44%. A decline followed through mid-2022 with margins dropping near 37-39%, but a recovery began in late 2022 and extended into 2023 and 2024, with margins consistently rising back over 45%. This pattern suggests operational profitability faced pressures mid-cycle but demonstrated resilience and improvement thereafter.

Asset Turnover

Asset turnover improved from approximately 0.38 in early 2021 to a peak near 0.48 in mid-2022, reflecting enhanced efficiency in generating revenue from assets. However, this higher efficiency was not entirely maintained, as turnover ratios declined slightly toward the end of 2024 and into 2025, returning near 0.43. The trend indicates fluctuating asset utilization efficiency with some weakening in the most recent periods.

Financial Leverage

Data on financial leverage is not available, preventing analysis of the company’s use of debt and equity to finance assets.

Return on Equity (ROE)

No data is provided for ROE, thus no conclusions can be drawn regarding the overall shareholder return or profitability relative to equity.

The analysis of the quarterly financial ratios over the observed periods reveals several key trends regarding profitability and asset efficiency.

Net Profit Margin

The net profit margin demonstrates variability but generally remains robust throughout the analyzed timeframe. It initially increased from 26.31% to a peak of 32.49% in the fourth quarter of 2021. Subsequently, a decline is noticeable in the first half of 2022, reaching a low of approximately 25.41%. A recovery phase follows, with margins rising again to surpass 33% by late 2023. In the most recent quarters, the margin stabilizes around 32%, indicating sustained profitability. This pattern suggests that while the company experienced some temporary pressure on profitability in early 2022, it effectively regained and maintained stronger margins afterward.

Asset Turnover

The asset turnover ratio, indicating how efficiently assets generate revenue, shows a general upward trend from 0.38 to near 0.48 in mid-2022, reflecting improved asset utilization. After reaching this peak, the ratio fluctuates slightly but remains within the 0.43 to 0.48 range. The slight decline observed towards the end of the period, dropping back to around 0.43 by late 2025, implies a modest decrease in asset efficiency. Despite this, the ratio maintains a relatively stable level, demonstrating consistent asset productivity on average.

Return on Assets (ROA)

The ROA follows a trajectory broadly consistent with the profit margin and asset turnover trends, starting at around 10.1% and climbing steadily to approximately 14.01% by the end of 2021. A decline occurs in early 2022 down to approximately 12.19%, reflecting the lower profitability and asset efficiency during that period. From mid-2022 onward, ROA improves again, reaching a high near 16.06% in late 2023 and then stabilizing in the range between 13.89% and 16.06% through 2025. The ROA indicates overall effective use of assets to generate earnings, despite some fluctuations linked to changes in margin and asset turnover.

In summary, the company demonstrates strong profitability and asset utilization with some cyclical variations. Early 2022 shows a dip across metrics, possibly indicating external challenges or internal adjustments. However, subsequent quarters display recovery and stabilization, signifying resilient financial performance and effective management of resources over the examined period.

Tax Burden

The Tax Burden ratio has remained relatively stable over the observed quarters, fluctuating narrowly between 0.78 and 0.83. This indicates a consistent level of effective tax rate relative to pre-tax income, with minor variations suggesting steady tax management or regulatory impact.

Interest Burden

The Interest Burden ratio has shown high stability, consistently staying between 0.84 and 0.89. This suggests the company has maintained a consistent level of interest expense relative to EBIT, reflecting stable financing costs and interest obligations over time.

EBIT Margin

The EBIT Margin percentage exhibits notable fluctuations. It began at around 40.2% in early 2021, reached highs exceeding 46%, particularly from mid-2023 onward, demonstrating an improvement in operating profitability. The decline observed in 2022, dipping below 38%, was subsequently reversed, indicating recovery and enhanced operational efficiency in later periods.

Asset Turnover

Asset Turnover ratio shows a gradual upward trend from 0.38 in early 2021 to peaks around 0.48 during mid-2022 and mid-2023. However, slight declines appear towards the most recent quarters, settling near 0.43 by late 2025. This pattern suggests an overall improvement in asset utilization efficiency with some recent moderation.

Return on Assets (ROA)

ROA demonstrates an upward trend starting near 10.1% in early 2021, peaking near 16% in mid-2023, followed by a moderate decrease to approximately 13.9% by late 2025. This trajectory indicates that the company improved its ability to generate profits from assets during the early to mid-period, although there is some tapering off in the final quarters assessed.

The analysis of the quarterly financial ratios over the observed periods reveals several key trends regarding profitability and burden ratios.

Tax Burden

The tax burden ratio has remained relatively stable throughout the periods, fluctuating narrowly between 0.78 and 0.83. This indicates consistent tax efficiency, with minor variations suggesting no significant changes in tax policy impact or tax expense management.

Interest Burden

The interest burden ratio shows a slight upward trend early on, peaking around 0.89 before stabilizing at approximately 0.87. This suggests that interest expenses relative to earnings before interest and taxes (EBIT) have slightly decreased in their impact over time, reflecting stable or slightly improving management of debt costs.

EBIT Margin

The EBIT margin exhibits a notable dip in the mid-periods, descending from highs above 44% to lows around 37-39%, followed by a strong recovery back to above 46% towards the later quarters. This pattern may reflect operational challenges or cost pressures during the intermediate quarters, with subsequent improvements in operational efficiency or revenue growth contributing to the stronger margins later.

Net Profit Margin

The net profit margin mirrors the EBIT margin trend but with slightly smaller fluctuations. Initial margins above 30% dropped to the mid-20% range before rebounding to maintain stability around 32-33%. This pattern indicates that while operating profitability was affected mid-period, net profitability recovered and remained robust, potentially aided by effective cost or tax management.

Overall, the company demonstrates resilient profitability metrics with some mid-cycle challenges that were successfully addressed towards the end of the periods. Both tax and interest burdens have been stable, supporting consistent bottom-line performance growth. The margin dynamics suggest a positive trajectory in operational efficiency and profitability management over time.