Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
McDonald’s Corp., solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
An analysis of the provided solvency ratios reveals generally stable, though subtly shifting, financial leverage positions over the five-year period. Several ratios indicate a moderate decrease in reliance on debt financing, while coverage ratios suggest a consistent ability to meet financial obligations, albeit with some fluctuation.
- Debt to Capital
- The Debt to Capital ratio demonstrates a decreasing trend, moving from 1.15 in 2021 to 1.04 in 2025. This suggests a gradual reduction in the proportion of financing derived from debt relative to equity and other capital sources. The inclusion of operating lease liabilities shows a similar, though less pronounced, decreasing trend, starting at 1.10 in 2021 and reaching 1.03 in 2025.
- Debt to Assets
- The Debt to Assets ratio exhibits a slight increase from 0.66 in 2021 to 0.74 in 2022, followed by relative stability between 0.73 and 0.71 from 2023 to 2025. This indicates a moderate level of assets financed by debt, with a minor initial increase followed by a period of consolidation. When operating lease liabilities are included, the ratio begins at 0.92 in 2021 and declines to 0.92 in 2025, showing a more substantial portion of assets financed by debt when these liabilities are considered, but with a consistent trend towards stabilization.
- Coverage Ratios
- Interest Coverage decreased from 8.70 in 2021 to 7.48 in 2022, then recovered to 8.73 in 2023, before settling around 7.87-7.89 in 2024 and 2025. This indicates fluctuating, but generally healthy, earnings available to cover interest expenses. Fixed Charge Coverage follows a similar pattern, declining from 4.32 in 2021 to 3.92 in 2022, increasing to 4.62 in 2023, and stabilizing around 4.35-4.39 in the final two years. This suggests a consistent, though variable, capacity to meet broader fixed financial obligations.
Overall, the observed trends suggest a cautious approach to debt management, with a slight reduction in leverage and consistent ability to cover financial obligations. The fluctuations in coverage ratios warrant continued monitoring, but do not currently indicate significant cause for concern.
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Debt Ratios
Coverage Ratios
Debt to Equity
McDonald’s Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Shareholders’ deficit | (1,791) | (3,797) | (4,707) | (6,003) | (4,601) | |
| Solvency Ratio | ||||||
| Debt to equity1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Airbnb Inc. | 0.24 | 0.24 | 0.24 | 0.36 | 0.42 | |
| Booking Holdings Inc. | — | — | — | 4.51 | 1.77 | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| DoorDash, Inc. | 0.27 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Starbucks Corp. | — | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Consumer Services | 14.63 | 16.16 | 28.03 | 24.19 | 7.90 | |
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | 0.92 | 1.10 | 1.34 | 1.51 | 1.50 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ deficit
= 42,325 ÷ -1,791 = —
2 Click competitor name to see calculations.
The solvency profile is characterized by a high degree of leverage and a persistent shareholders' deficit throughout the observed period. While total debt has trended upward, the equity position has shown a consistent recovery following a peak deficit in 2022.
- Total Debt Trajectory
- Total debt increased from US$ 35,623 million in 2021 to US$ 42,325 million by 2025. The growth was most pronounced between 2022 and 2023, where debt rose by approximately US$ 3,696 million. A brief stabilization occurred in 2024 with a marginal decrease to US$ 40,205 million, followed by a renewed increase in 2025.
- Shareholders' Deficit Trends
- The company operated with negative shareholders' equity for the entire duration. The deficit widened from US$ 4,601 million in 2021 to a peak of US$ 6,003 million in 2022. Subsequently, a steady recovery trend emerged, with the deficit narrowing to US$ 4,707 million in 2023, US$ 3,797 million in 2024, and reaching its lowest point of US$ 1,791 million by the end of 2025.
- Debt to Equity Interpretation
- The presence of a shareholders' deficit results in a negative debt-to-equity ratio, signaling that liabilities exceed total assets. Although total debt has risen, the concurrent and significant reduction in the shareholders' deficit indicates a movement toward a more stable capital structure. The narrowing of the deficit suggests a reduction in the gap between total liabilities and assets, despite the increasing absolute volume of debt.
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Debt to Equity (including Operating Lease Liability)
McDonald’s Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Current operating lease liability | 671) | 625) | 643) | 640) | 706) | |
| Long-term operating lease liability | 11,817) | 11,118) | 11,528) | 10,834) | 13,021) | |
| Total debt (including operating lease liability) | 54,813) | 51,948) | 53,091) | 48,699) | 49,349) | |
| Shareholders’ deficit | (1,791) | (3,797) | (4,707) | (6,003) | (4,601) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.28 | 0.27 | 0.28 | 0.42 | 0.51 | |
| Booking Holdings Inc. | — | — | — | 4.75 | 1.85 | |
| Chipotle Mexican Grill Inc. | 1.79 | 1.24 | 1.32 | 1.58 | 1.53 | |
| DoorDash, Inc. | 0.33 | 0.07 | 0.08 | 0.08 | 0.09 | |
| Starbucks Corp. | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 19.92 | 22.23 | 38.47 | 33.45 | 11.35 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 1.17 | 1.39 | 1.69 | 1.90 | 1.87 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ deficit
= 54,813 ÷ -1,791 = —
2 Click competitor name to see calculations.
The financial position over the five-year period is characterized by a consistent negative equity balance and a general increase in total leverage. While the absolute value of the shareholders' deficit has improved significantly in recent years, the reliance on debt and lease obligations remains high.
- Total Debt Trends
- Total debt, inclusive of operating lease liabilities, exhibited a general upward trend, increasing from US$ 49,349 million in 2021 to US$ 54,813 million by 2025. Although minor contractions occurred in 2022 and 2024, the overall trajectory indicates an expansion of the company's total liabilities over the analyzed timeframe.
- Shareholders' Deficit Analysis
- A persistent shareholders' deficit was observed across all reporting periods. The deficit widened to its peak of US$ 6,003 million in 2022. However, from 2023 through 2025, a consistent recovery trend is evident, with the deficit narrowing to US$ 1,791 million by the end of 2025. This suggests a systematic reduction in the negative equity position.
- Solvency Ratio Interpretation
- The debt-to-equity ratio remains negative due to the deficit in shareholders' equity. Because the deficit has decreased (approached zero) while total debt has increased, the ratio has become more deeply negative over time. This mathematical trend highlights a capital structure heavily dependent on external financing and lease obligations, as the equity base remains insufficient to offset total debt.
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Debt to Capital
McDonald’s Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Shareholders’ deficit | (1,791) | (3,797) | (4,707) | (6,003) | (4,601) | |
| Total capital | 40,534) | 36,408) | 36,214) | 31,222) | 31,022) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 1.04 | 1.10 | 1.13 | 1.19 | 1.15 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Airbnb Inc. | 0.20 | 0.19 | 0.20 | 0.26 | 0.29 | |
| Booking Holdings Inc. | 1.42 | 1.32 | 1.24 | 0.82 | 0.64 | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| DoorDash, Inc. | 0.21 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Starbucks Corp. | 2.01 | 1.92 | 2.08 | 2.41 | 1.57 | |
| Debt to Capital, Sector | ||||||
| Consumer Services | 0.94 | 0.94 | 0.97 | 0.96 | 0.89 | |
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | 0.48 | 0.52 | 0.57 | 0.60 | 0.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 42,325 ÷ 40,534 = 1.04
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased before demonstrating a declining trend towards the end of the observed timeframe.
- Overall Trend
- The Debt to Capital ratio began at 1.15 in 2021 and rose to 1.19 in 2022. Following this increase, the ratio decreased to 1.13 in 2023, continued to 1.10 in 2024, and further declined to 1.04 in 2025. This indicates a decreasing reliance on debt financing relative to total capital over the latter portion of the period.
- Year-over-Year Changes
- From 2021 to 2022, the ratio increased by 0.04, suggesting a greater proportion of debt financing. However, each subsequent year showed a decrease. The largest year-over-year decrease occurred between 2024 and 2025, with a reduction of 0.06.
- Debt and Capital Components
- Total debt increased from US$35,623 million in 2021 to US$42,325 million in 2025, representing an overall increase of approximately 18.8%. Total capital also increased, from US$31,022 million to US$40,534 million, an increase of roughly 30.6%. The greater increase in total capital compared to total debt contributed to the observed decline in the Debt to Capital ratio.
The observed trend suggests a strengthening capital structure, as the company appears to be decreasing its dependence on debt relative to its overall capital base. The increase in total capital, exceeding the increase in total debt, is the primary driver of this change.
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Debt to Capital (including Operating Lease Liability)
McDonald’s Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Current operating lease liability | 671) | 625) | 643) | 640) | 706) | |
| Long-term operating lease liability | 11,817) | 11,118) | 11,528) | 10,834) | 13,021) | |
| Total debt (including operating lease liability) | 54,813) | 51,948) | 53,091) | 48,699) | 49,349) | |
| Shareholders’ deficit | (1,791) | (3,797) | (4,707) | (6,003) | (4,601) | |
| Total capital (including operating lease liability) | 53,022) | 48,151) | 48,384) | 42,696) | 44,748) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 1.03 | 1.08 | 1.10 | 1.14 | 1.10 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.22 | 0.21 | 0.22 | 0.30 | 0.34 | |
| Booking Holdings Inc. | 1.40 | 1.30 | 1.22 | 0.83 | 0.65 | |
| Chipotle Mexican Grill Inc. | 0.64 | 0.55 | 0.57 | 0.61 | 0.61 | |
| DoorDash, Inc. | 0.25 | 0.06 | 0.07 | 0.07 | 0.08 | |
| Starbucks Corp. | 1.44 | 1.41 | 1.48 | 1.58 | 1.29 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 0.95 | 0.96 | 0.97 | 0.97 | 0.92 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.54 | 0.58 | 0.63 | 0.65 | 0.65 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 54,813 ÷ 53,022 = 1.03
2 Click competitor name to see calculations.
The Debt to Capital ratio, inclusive of operating lease liabilities, exhibits a generally decreasing trend over the five-year period. While fluctuations are present, the overall movement suggests a strengthening solvency position.
- Total Debt (including operating lease liability)
- Total debt demonstrated an initial decrease from $49,349 million in 2021 to $48,699 million in 2022. This was followed by an increase to $53,091 million in 2023, a slight decrease to $51,948 million in 2024, and a further increase to $54,813 million in 2025. The increases in 2023 and 2025 suggest potential investment in operations or financing activities, while the decreases in 2022 and 2024 may indicate debt reduction or a change in lease obligations.
- Total Capital (including operating lease liability)
- Total capital followed a similar pattern, decreasing from $44,748 million in 2021 to $42,696 million in 2022. An increase was then observed in 2023, reaching $48,384 million, followed by a slight decrease to $48,151 million in 2024, and a further increase to $53,022 million in 2025. The fluctuations in total capital likely correspond to changes in equity and debt financing.
- Debt to Capital Ratio
- The Debt to Capital ratio began at 1.10 in 2021, increased to 1.14 in 2022, and then returned to 1.10 in 2023. A continued decrease was observed in 2024, with the ratio falling to 1.08, and further decreasing to 1.03 in 2025. This downward trend indicates that the proportion of debt financing relative to total capital is diminishing, suggesting a reduced reliance on debt and potentially improved financial stability. The ratio remained above 1.0 throughout the period, indicating that debt financing exceeds equity financing.
The observed trends suggest a potential shift towards a more balanced capital structure, with a decreasing dependence on debt financing. However, the continued presence of a ratio above 1.0 warrants ongoing monitoring to ensure sustainable financial health.
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Debt to Assets
McDonald’s Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Total assets | 59,515) | 55,182) | 56,147) | 50,436) | 53,854) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.71 | 0.73 | 0.73 | 0.74 | 0.66 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Airbnb Inc. | 0.09 | 0.10 | 0.10 | 0.12 | 0.14 | |
| Booking Holdings Inc. | 0.64 | 0.60 | 0.59 | 0.49 | 0.46 | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| DoorDash, Inc. | 0.14 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Starbucks Corp. | 0.50 | 0.50 | 0.52 | 0.53 | 0.47 | |
| Debt to Assets, Sector | ||||||
| Consumer Services | 0.48 | 0.47 | 0.49 | 0.49 | 0.46 | |
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | 0.29 | 0.32 | 0.34 | 0.35 | 0.36 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 42,325 ÷ 59,515 = 0.71
2 Click competitor name to see calculations.
The Debt-to-Assets ratio exhibits a generally stable pattern over the five-year period, with some fluctuation. An initial increase is followed by a period of relative consistency, concluding with a slight decrease.
- Overall Trend
- The ratio increased from 0.66 in 2021 to 0.74 in 2022, indicating a greater proportion of assets financed by debt. This was the largest single-year increase in the observed period. Following 2022, the ratio remained relatively stable, fluctuating between 0.73 and 0.74 for 2023 and 2024. A modest decrease to 0.71 is observed in 2025.
- Year-over-Year Changes
- The most significant year-over-year change occurred between 2021 and 2022, with an increase of 0.08. Subsequent annual changes were minimal, with differences of no more than 0.01 between consecutive years. The final year, 2025, shows a decrease of 0.02 compared to 2024.
- Ratio Levels
- Throughout the period, the ratio remained above 0.60, suggesting a substantial reliance on debt financing. The ratio peaked at 0.74 in 2022 and concluded at 0.71 in 2025. The consistency around 0.73 suggests a deliberate management of the debt structure relative to asset base.
- Debt and Asset Movements
- Total debt increased consistently from 2021 to 2025, with the exception of a slight decrease between 2022 and 2023. Total assets decreased in 2022 but then increased in subsequent years. The interplay between these increases and decreases influences the Debt-to-Assets ratio, explaining the observed fluctuations.
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Debt to Assets (including Operating Lease Liability)
McDonald’s Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term borrowings and current maturities of long-term debt | —) | —) | 2,192) | —) | —) | |
| Current finance lease liability | 23) | 11) | 46) | 22) | —) | |
| Long-term debt, excluding current maturities | 39,973) | 38,424) | 37,153) | 35,904) | 35,623) | |
| Long-term finance lease liability | 2,329) | 1,770) | 1,530) | 1,300) | —) | |
| Total debt | 42,325) | 40,205) | 40,921) | 37,225) | 35,623) | |
| Current operating lease liability | 671) | 625) | 643) | 640) | 706) | |
| Long-term operating lease liability | 11,817) | 11,118) | 11,528) | 10,834) | 13,021) | |
| Total debt (including operating lease liability) | 54,813) | 51,948) | 53,091) | 48,699) | 49,349) | |
| Total assets | 59,515) | 55,182) | 56,147) | 50,436) | 53,854) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.92 | 0.94 | 0.95 | 0.97 | 0.92 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.10 | 0.11 | 0.11 | 0.15 | 0.18 | |
| Booking Holdings Inc. | 0.66 | 0.62 | 0.62 | 0.52 | 0.48 | |
| Chipotle Mexican Grill Inc. | 0.56 | 0.49 | 0.50 | 0.54 | 0.53 | |
| DoorDash, Inc. | 0.17 | 0.04 | 0.05 | 0.05 | 0.06 | |
| Starbucks Corp. | 0.83 | 0.82 | 0.83 | 0.84 | 0.75 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 0.65 | 0.65 | 0.67 | 0.67 | 0.67 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.38 | 0.41 | 0.43 | 0.44 | 0.44 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 54,813 ÷ 59,515 = 0.92
2 Click competitor name to see calculations.
The Debt to Assets ratio, including operating lease liability, exhibits a relatively stable pattern over the five-year period. While fluctuations are present, the ratio remains consistently above 0.90, indicating a significant proportion of assets are financed by debt.
- Overall Trend
- The ratio initially increased from 0.92 in 2021 to 0.97 in 2022, suggesting a growing reliance on debt financing relative to assets. This was followed by a slight decrease to 0.95 in 2023 and 0.94 in 2024. The most recent year, 2025, shows a return to 0.92, mirroring the level observed in 2021.
- Year-over-Year Changes
- The largest year-over-year increase occurred between 2021 and 2022, with a rise of 0.05. Conversely, the most substantial decrease was observed between 2022 and 2023, declining by 0.02. The changes in subsequent years are comparatively smaller, indicating a stabilization in the ratio after the initial increase.
- Debt and Asset Movements
- Total debt, including operating lease liability, increased from US$49,349 million in 2021 to US$54,813 million in 2025. Total assets also experienced growth, moving from US$53,854 million in 2021 to US$59,515 million in 2025. The ratio’s fluctuations are a result of the interplay between these two values; while both increased overall, their differing rates of growth caused the observed changes in the Debt to Assets ratio.
The consistency of the ratio above 0.90 suggests a deliberate capital structure strategy. The slight variations observed may be attributable to specific financing or investment decisions made during each period.
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Financial Leverage
McDonald’s Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 59,515) | 55,182) | 56,147) | 50,436) | 53,854) | |
| Shareholders’ deficit | (1,791) | (3,797) | (4,707) | (6,003) | (4,601) | |
| Solvency Ratio | ||||||
| Financial leverage1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Airbnb Inc. | 2.71 | 2.49 | 2.53 | 2.88 | 2.87 | |
| Booking Holdings Inc. | — | — | — | 9.12 | 3.83 | |
| Chipotle Mexican Grill Inc. | 3.18 | 2.52 | 2.63 | 2.93 | 2.90 | |
| DoorDash, Inc. | 1.96 | 1.65 | 1.59 | 1.45 | 1.46 | |
| Starbucks Corp. | — | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Consumer Services | 30.67 | 34.15 | 57.76 | 49.57 | 17.02 | |
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | 3.11 | 3.44 | 3.95 | 4.32 | 4.22 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ deficit
= 59,515 ÷ -1,791 = —
2 Click competitor name to see calculations.
The analysis of the solvency position reveals a persistent negative equity state coupled with a general expansion of the asset base over the five-year period. Total assets experienced a slight contraction in 2022 before entering a period of consistent growth, peaking at US$ 59,515 million by December 31, 2025.
- Shareholders' Deficit Trend
- A consistent shareholders' deficit is observed throughout the period, indicating that total liabilities exceed total assets. The deficit reached its maximum value in 2022 at US$ 6,003 million. However, a steady recovery trend is evident from 2023 through 2025, with the deficit narrowing significantly to US$ 1,791 million by the end of the period.
- Financial Leverage Dynamics
- The financial leverage ratio is characterized by negative values due to the deficit in shareholders' equity. While the asset base grew by approximately 10.6% between 2021 and 2025, the simultaneous reduction of the equity deficit suggests a strategic shift in the capital structure. The narrowing gap between assets and liabilities indicates a trajectory toward improving solvency, although the company remains in a technically negative equity position.
- Solvency Implications
- The combination of increasing total assets and a decreasing shareholders' deficit suggests a reduction in the reliance on external debt relative to the equity position, despite the continued presence of a deficit. The significant contraction of the deficit from 2022 to 2025 reflects an improvement in the net book value of the organization.
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Interest Coverage
McDonald’s Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 8,563) | 8,223) | 8,469) | 6,177) | 7,545) | |
| Add: Income tax expense | 2,334) | 2,122) | 2,053) | 1,648) | 1,583) | |
| Add: Interest expense, net of capitalized interest | 1,582) | 1,506) | 1,361) | 1,207) | 1,186) | |
| Earnings before interest and tax (EBIT) | 12,479) | 11,851) | 11,883) | 9,032) | 10,314) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 7.89 | 7.87 | 8.73 | 7.48 | 8.70 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Airbnb Inc. | 1,046.67 | 139.79 | 26.33 | 83.88 | 0.31 | |
| Booking Holdings Inc. | 5.23 | 6.63 | 7.11 | 11.03 | 5.39 | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | -698.50 | -32.07 | |
| Starbucks Corp. | 5.62 | 9.84 | 10.82 | 9.76 | 12.40 | |
| Interest Coverage, Sector | ||||||
| Consumer Services | 8.03 | 9.30 | 9.51 | 9.43 | 7.55 | |
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | 13.89 | 15.00 | 12.23 | 9.30 | 13.23 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 12,479 ÷ 1,582 = 7.89
2 Click competitor name to see calculations.
The period under review demonstrates fluctuations in earnings before interest and tax (EBIT) alongside increasing interest expense, resulting in a dynamic interest coverage ratio. Overall, the interest coverage ratio exhibits a moderate degree of volatility across the five-year period.
- Earnings Before Interest and Tax (EBIT)
- EBIT decreased from US$10,314 million in 2021 to US$9,032 million in 2022, representing a decline of approximately 12.4%. A subsequent recovery is observed, with EBIT increasing to US$11,883 million in 2023. This upward trend continues, albeit at a slower pace, reaching US$11,851 million in 2024 and further increasing to US$12,479 million in 2025. The overall trend for EBIT is positive, with 2025 representing the highest value within the observed period.
- Interest Expense
- Interest expense consistently increased throughout the period. Starting at US$1,186 million in 2021, it rose to US$1,207 million in 2022, US$1,361 million in 2023, US$1,506 million in 2024, and finally reached US$1,582 million in 2025. This represents a cumulative increase of approximately 33.3% from 2021 to 2025.
- Interest Coverage Ratio
- The interest coverage ratio began at 8.70 in 2021, then decreased to 7.48 in 2022, coinciding with the decline in EBIT and the increase in interest expense. The ratio recovered to 8.73 in 2023, mirroring the increase in EBIT. A subsequent decrease is noted in 2024, with the ratio falling to 7.87. The ratio remains relatively stable in 2025 at 7.89. While fluctuations are present, the ratio consistently remains above 7.4, indicating a generally healthy ability to meet interest obligations. The slight decline in the latter years, despite increasing EBIT, suggests that interest expense is growing at a faster rate than earnings.
In summary, while the company demonstrates an ability to cover its interest obligations, the increasing trend in interest expense warrants continued monitoring. The relatively stable, but slightly declining, interest coverage ratio in the most recent years suggests a potential need to manage debt levels or improve operational efficiency to maintain a comfortable margin of safety.
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Fixed Charge Coverage
McDonald’s Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 8,563) | 8,223) | 8,469) | 6,177) | 7,545) | |
| Add: Income tax expense | 2,334) | 2,122) | 2,053) | 1,648) | 1,583) | |
| Add: Interest expense, net of capitalized interest | 1,582) | 1,506) | 1,361) | 1,207) | 1,186) | |
| Earnings before interest and tax (EBIT) | 12,479) | 11,851) | 11,883) | 9,032) | 10,314) | |
| Add: Rent expense | 1,631) | 1,582) | 1,542) | 1,476) | 1,560) | |
| Earnings before fixed charges and tax | 14,110) | 13,433) | 13,425) | 10,509) | 11,874) | |
| Interest expense, net of capitalized interest | 1,582) | 1,506) | 1,361) | 1,207) | 1,186) | |
| Rent expense | 1,631) | 1,582) | 1,542) | 1,476) | 1,560) | |
| Fixed charges | 3,213) | 3,088) | 2,903) | 2,683) | 2,746) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 4.39 | 4.35 | 4.62 | 3.92 | 4.32 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Airbnb Inc. | 63.74 | 44.26 | 15.91 | 20.69 | 0.42 | |
| Booking Holdings Inc. | 4.82 | 5.96 | 6.09 | 8.12 | 3.82 | |
| Chipotle Mexican Grill Inc. | 4.69 | 5.13 | 4.71 | 3.98 | 3.23 | |
| DoorDash, Inc. | 8.96 | 2.51 | -3.94 | -15.86 | -6.02 | |
| Starbucks Corp. | 1.95 | 3.17 | 3.51 | 3.08 | 3.61 | |
| Fixed Charge Coverage, Sector | ||||||
| Consumer Services | 4.15 | 4.74 | 4.61 | 4.03 | 3.55 | |
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | 5.16 | 5.95 | 4.95 | 3.65 | 5.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 14,110 ÷ 3,213 = 4.39
2 Click competitor name to see calculations.
The company’s ability to meet its fixed financial obligations, as indicated by fixed charge coverage, experienced fluctuations over the five-year period. Earnings before fixed charges and tax, and fixed charges themselves, both exhibited trends that influenced the overall coverage ratio.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax decreased from US$11,874 million in 2021 to US$10,509 million in 2022, representing a decline. Subsequently, these earnings increased to US$13,425 million in 2023 and remained relatively stable at US$13,433 million in 2024. A further increase to US$14,110 million was observed in 2025, indicating a positive trend in earnings generation.
- Fixed Charges
- Fixed charges demonstrated a slight decrease from US$2,746 million in 2021 to US$2,683 million in 2022. These charges then increased consistently over the subsequent years, reaching US$2,903 million in 2023, US$3,088 million in 2024, and US$3,213 million in 2025. This upward trend suggests a growing level of fixed financial commitments.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio decreased from 4.32 in 2021 to 3.92 in 2022, coinciding with the decline in earnings before fixed charges and tax. The ratio improved to 4.62 in 2023, reflecting the increase in earnings. A slight decrease to 4.35 was noted in 2024, followed by a marginal increase to 4.39 in 2025. Overall, the ratio remained above 4.0 throughout the period, suggesting a generally comfortable ability to cover fixed charges, despite the fluctuations.
The interplay between earnings and fixed charges resulted in a period of decreased coverage in 2022, followed by improvement and relative stabilization. The increasing fixed charges in later years were offset by concurrent increases in earnings, maintaining a reasonably consistent coverage level.
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