Analysis of Liquidity Ratios
Quarterly Data
Liquidity ratios measure the company ability to meet its short-term obligations.
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Liquidity Ratios (Summary)
McDonald’s Corp., liquidity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Current Ratio
- The current ratio demonstrates notable volatility throughout the observed quarters. It began at a relatively strong level of 1.9 in the first quarter of 2020 but experienced a sharp decline to 0.91 by the second quarter of the same year. Subsequently, the ratio displayed a pattern of gradual recovery, peaking at 1.78 by the end of 2021. In the following quarters, fluctuations persisted, with the ratio decreasing below 1.0 at several points, notably in early 2024 at 0.78, before a slight improvement to 1.19 was observed in the first quarter of 2025. Overall, the current ratio's movements indicate intermittent periods of tightened liquidity, occasionally falling below the benchmark level of 1.0, which suggests challenges in meeting short-term liabilities at those times.
- Quick Ratio
- The quick ratio mirrors the volatility observed in the current ratio but consistently remains lower in magnitude. Starting at 1.77 in March 2020, it dropped sharply to 0.84 by June 2020. Following this decline, a recovery phase ensued with increases up to 1.64 by the end of 2021. Afterward, the ratio exhibited oscillations, dipping below 1.0 during multiple quarters, particularly in 2024, reaching a low of 0.58 in the fourth quarter. The ratio ended at 0.9 in the first quarter of 2025, underscoring persistent pressure on the company’s liquid assets relative to current liabilities. The recurring dips under 1.0 suggest periodic insufficiencies in immediately available assets to cover short-term obligations without relying on inventory sales.
- Cash Ratio
- The cash ratio exhibited the most pronounced fluctuations and generally lower values compared to the other liquidity ratios. Initially high at 1.35 in the first quarter of 2020, it rapidly declined to 0.45 by the second quarter. Subsequent quarters saw some recovery, reaching 1.17 by the end of 2021. However, from 2022 onwards, the cash ratio experienced a downward trend with several low points, including a significant drop to 0.17 in the second quarter of 2024. By the first quarter of 2025, the ratio stood at 0.31, indicating a reduced level of immediate cash and cash equivalents relative to current liabilities. This decreasing trend in cash liquidity may signal more constrained cash management or increased reliance on other current assets for liquidity.
Current Ratio
McDonald’s Corp., current ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Current assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Current ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Current Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit a fluctuating trend across the analyzed periods. Initially, they declined from 7,557 million USD at the end of Q1 2020 to a low of 5,468 million USD by Q1 2021. Subsequently, there was a recovery phase, with current assets rising to a peak of 7,986 million USD at the end of Q4 2021. Afterward, a noticeable decline occurs from Q1 2022 to Q2 2024, bottoming out at 4,057 million USD, followed by a slight recovery to approximately 4,735 million USD by Q1 2025. Overall, the data indicates periods of both contraction and expansion in short-term asset holdings, with significant volatility over the five-year span.
- Current Liabilities
- Current liabilities also demonstrate considerable volatility through the quarters. Starting at 3,988 million USD in Q1 2020, liabilities sharply increased to a high of 7,246 million USD in Q2 2020. Subsequently, they decreased and oscillated within a range between approximately 3,480 million USD and 6,859 million USD, peaking again notably at the end of Q4 2021. More recent quarters from Q1 2023 show fluctuations with a downward trend followed by intermittent rises, ending near 4,008 million USD in Q1 2025. This pattern suggests variability in short-term obligations that may be influenced by operational cycles, financing activities, or liquidity management strategies.
- Current Ratio
- The current ratio fluctuates significantly, reflecting changes in liquidity and short-term financial health. The ratio began at 1.9 in Q1 2020 but dropped below parity in Q2 2020 to 0.91, indicating a period where current liabilities exceeded current assets. Afterward, it recovered and generally maintained levels above 1 through Q4 2021, peaking at 1.78 in Q4 2021, signaling improved liquidity during this period. However, from Q1 2022 onward, the ratio shows higher variability, dipping below 1 on multiple occasions—particularly in Q4 2022 (0.78) and Q1 2024 (0.83)—highlighting instances of tight liquidity positions. The ratio ends at 1.18 in Q1 2025, suggesting a modest improvement. Overall, the current ratio data points to fluctuating liquidity conditions with periods of both sufficient and constrained short-term asset coverage relative to liabilities.
- Summary of Trends
- There is clear evidence of volatility in both current assets and current liabilities over the analyzed quarters. Peaks in current liabilities generally correspond with decreases in the current ratio, suggesting periods where liabilities outpaced assets, impacting short-term financial stability. Conversely, increases in current assets often enhance the current ratio, reflecting stronger liquidity positions. The overall pattern highlights a cyclical behavior in working capital components, requiring ongoing management attention to maintain adequate liquidity and operational flexibility.
Quick Ratio
McDonald’s Corp., quick ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cash and equivalents | ||||||||||||||||||||||||||||
| Accounts and notes receivable | ||||||||||||||||||||||||||||
| Total quick assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Quick ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Quick Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited significant fluctuations over the quarters. Initially, a noticeable decline occurred from March 2020 to March 2021, decreasing from 7,075 million USD to 4,753 million USD. A recovery phase followed through the end of 2021, reaching 6,582 million USD in December 2021. However, starting in 2022, the quick assets generally trended downward with some intermittent increases, peaking again at 7,067 million USD in December 2023 before falling sharply to around 3,625 million USD by March 2025. This volatility suggests varied liquidity conditions with periods of both strengthening and weakening asset coverage.
- Current Liabilities
- Current liabilities showed considerable variability throughout the timeline. The liabilities surged from 3,988 million USD in March 2020 to a peak of 7,246 million USD in June 2020, followed by a gradual decline to 3,935 million USD by June 2021. The subsequent period saw another peak at 6,859 million USD in December 2023 before decreasing sharply toward 4,008 million USD in March 2025. This pattern indicates fluctuating short-term obligations that impacted the company’s liquidity management, potentially reflecting changes in operational cycles, financing strategies, or payment terms.
- Quick Ratio
- The quick ratio varied significantly, reflecting changes in immediate liquidity relative to current liabilities. It dropped dramatically from 1.77 in March 2020 to below 1.0 from June 2020 through December 2020, suggesting tight liquidity positions during that period. Recovery occurred in 2021, with values consistently above 1.0 and peaking at 1.64 in December 2021, indicating improved liquidity. However, from 2022 onward, the ratio showed a declining trend, falling below 1.0 in multiple quarters and reaching lows of 0.58 in December 2024. The ratio stabilized around 0.9 by March 2025, still below the early period benchmark. Overall, the data reveal periods of both strong and weak liquidity, with recent quarters indicating potential pressure on quick asset coverage of short-term liabilities.
- Summary Insights
- The analysis of quick assets, current liabilities, and the quick ratio reveals a pattern of fluctuating liquidity. Periods of improved liquidity in late 2021 and late 2023 contrast with several quarters marked by liquidity tightening, especially in mid-2020 and through 2024. This volatility suggests the company faced varying operational and financial challenges impacting its ability to maintain a consistent liquidity buffer. Attention to managing current liabilities and maintaining adequate quick assets will be essential to support liquidity stability going forward.
Cash Ratio
McDonald’s Corp., cash ratio calculation (quarterly data)
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
| Cash and equivalents | ||||||||||||||||||||||||||||
| Total cash assets | ||||||||||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||||||||||
| Liquidity Ratio | ||||||||||||||||||||||||||||
| Cash ratio1 | ||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||
| Cash Ratio, Competitors2 | ||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets show considerable volatility over the observed quarters. Beginning at a relatively high level of 5380 million USD at the end of Q1 2020, cash assets decreased sharply in the subsequent quarter to 3256 million USD. During the rest of 2020, cash levels fluctuated around the 3000-4700 million USD range with a notable peak in Q4 2021 at 4709 million USD. However, from early 2022 onward, cash assets demonstrate a generally declining trend with intermittent recoveries; for instance, a drop to 1626 million USD in Q2 2023 is followed by a rise to 4579 million USD in Q4 2023. In the most recent quarters of 2024 and early 2025, cash assets remain at lower levels between approximately 800 and 1200 million USD, indicating a substantial reduction compared to earlier periods.
- Current Liabilities
- Current liabilities exhibit significant fluctuations throughout the periods. Starting from 3988 million USD in Q1 2020, liabilities jumped markedly to over 7000 million USD in Q2 2020. Subsequently, liabilities largely oscillate between approximately 3500 and 6900 million USD without a clear long-term upward or downward trend. Peaks are noted in Q2 2024 at 6308 million USD and Q4 2023 at 6859 million USD, while troughs occur around 3480 million USD in Q2 2022 and 3861 million USD in Q1 2025. This variability indicates ongoing changes in short-term obligations, without a steady pattern of increase or decrease.
- Cash Ratio
- The cash ratio, representing liquidity by comparing cash assets to current liabilities, mirrors the variability of underlying components. Initial ratios are relatively strong at 1.35 in Q1 2020 but deteriorate quickly to levels below 0.6 during mid-2020, signaling reduced liquidity. The ratio experiences some recovery phases, such as rising back to 1.17 in Q4 2021. However, from 2022 onward, the ratio largely remains below 1.0, frequently dipping to values near or under 0.3 in 2024 and early 2025. This suggests that cash assets in recent quarters are insufficient to cover current liabilities fully, highlighting a tighter liquidity position.
- Summary of Trends and Insights
- Over the assessment period, the company demonstrates wide fluctuations in cash assets and current liabilities without consistent long-term growth or reduction. The notable decrease in cash holdings in the latter part of the timeline, combined with liabilities that remain substantial, leads to a general weakening in liquidity as evidenced by a declining cash ratio. This pattern could raise concerns regarding the company's ability to meet short-term obligations with readily available cash, especially in quarters where the cash ratio is well below 1.0. The sporadic nature of these movements emphasizes a need for strategic assessment of working capital management to stabilize liquidity and enhance financial resilience.