Analysis of Solvency Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 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).
- Debt to Capital Ratio
- The debt to capital ratio displays a gradual downward trend over the observed periods, starting at 1.25 in March 2021 and declining to 1.07 by June 2025. This indicates a modest reduction in the proportion of debt relative to the company's total capital, suggesting an improving capital structure with potentially less reliance on debt financing.
- Debt to Assets Ratio
- The debt to assets ratio exhibits relative stability with minor fluctuations, beginning at 0.70 in March 2021, experiencing slight increases and decreases around 0.70 to 0.72, and ending at 0.70 in June 2025. This consistency implies that the relationship between total debt and total assets remains relatively constant, indicating stable asset financing mix over time.
- Interest Coverage Ratio
- The interest coverage ratio shows some variability but maintains a generally strong level throughout the period. Initially valued at 6.37 in March 2021, it rises to peaks around 8.7 by the end of 2021 and sustains values predominantly in the 7.8 to 8.8 range thereafter. This signifies the company's consistent ability to comfortably meet its interest obligations from operating earnings, reflecting financial stability in terms of debt servicing capacity.
Debt Ratios
Coverage Ratios
Debt to Equity
McDonald’s Corp., debt to equity calculation (quarterly data)
| Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | 602) | 80) | —) | 596) | —) | 604) | 2,192) | —) | —) | 524) | —) | —) | —) | —) | —) | 500) | 500) | 900) | ||||||
| Long-term debt, excluding current maturities | 40,801) | 38,845) | 38,424) | 38,990) | 38,524) | 36,764) | 37,153) | 37,275) | 35,710) | 36,604) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 34,628) | 34,923) | 34,823) | ||||||
| Total debt | 41,403) | 38,925) | 38,424) | 39,586) | 38,524) | 37,368) | 39,345) | 37,275) | 35,710) | 37,128) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 35,128) | 35,423) | 35,723) | ||||||
| Shareholders’ equity (deficit) | (2,760) | (3,454) | (3,797) | (5,177) | (4,824) | (4,833) | (4,707) | (4,855) | (4,999) | (5,776) | (6,003) | (6,566) | (6,370) | (5,991) | (4,601) | (5,675) | (5,808) | (7,236) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to equity1 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 0.26 | 0.25 | 0.24 | 0.23 | 0.25 | 0.25 | 0.24 | 0.22 | 0.39 | 0.38 | 0.36 | 0.36 | 0.38 | 0.42 | — | — | — | — | ||||||
| Booking Holdings Inc. | — | — | — | — | — | — | — | — | — | 11.29 | 4.49 | 2.50 | 2.37 | 2.23 | 1.77 | 1.99 | 2.54 | 2.90 | ||||||
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
| DoorDash, Inc. | 0.30 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Starbucks Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 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).
1 Q2 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity (deficit)
= 41,403 ÷ -2,760 = —
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding the company’s capital structure over the analyzed periods.
- Total Debt
- The total debt shows an overall upward trajectory from March 31, 2021, through June 30, 2025. Initially, it decreased slightly from $35,723 million to around $33,989 million by March 31, 2022, before reversing and increasing steadily to $41,403 million by June 30, 2025. This indicates a growing reliance on debt financing in the later periods.
- Shareholders’ Equity (Deficit)
- Shareholders’ equity remains negative throughout the entire timeline, although its magnitude fluctuates. From March 31, 2021, it improved somewhat until the end of 2021, moving from a deficit of -$7,236 million to -$4,601 million. However, from early 2022 onward, the deficit widened slightly and then oscillated, reaching a less negative position at -$2,760 million by June 30, 2025. This pattern suggests some improvement in equity, though it remains in deficit.
- Debt to Equity Ratio
- Although the explicit debt-to-equity ratio is not provided, it can be inferred due to the data availability. Given total debt is increasing while shareholders’ equity remains negative (deficit) but improving (becoming less negative), the company’s debt to equity ratio remains at high levels, implying significant leverage. The increasing total debt combined with a persistent equity deficit reflects a high risk profile from a solvency perspective, with potentially increased financial risk and cost.
Overall, the data demonstrates that the company has been raising debt substantially over time while shareholders’ equity remains negative but slightly improving. This signals a leveraged financial structure with ongoing efforts, or market conditions, impacting the equity position. Such trends warrant close monitoring for sustainability and risk management implications.
Debt to Capital
McDonald’s Corp., debt to capital calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | 602) | 80) | —) | 596) | —) | 604) | 2,192) | —) | —) | 524) | —) | —) | —) | —) | —) | 500) | 500) | 900) | ||||||
| Long-term debt, excluding current maturities | 40,801) | 38,845) | 38,424) | 38,990) | 38,524) | 36,764) | 37,153) | 37,275) | 35,710) | 36,604) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 34,628) | 34,923) | 34,823) | ||||||
| Total debt | 41,403) | 38,925) | 38,424) | 39,586) | 38,524) | 37,368) | 39,345) | 37,275) | 35,710) | 37,128) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 35,128) | 35,423) | 35,723) | ||||||
| Shareholders’ equity (deficit) | (2,760) | (3,454) | (3,797) | (5,177) | (4,824) | (4,833) | (4,707) | (4,855) | (4,999) | (5,776) | (6,003) | (6,566) | (6,370) | (5,991) | (4,601) | (5,675) | (5,808) | (7,236) | ||||||
| Total capital | 38,643) | 35,471) | 34,627) | 34,409) | 33,700) | 32,535) | 34,639) | 32,420) | 30,711) | 31,352) | 29,900) | 28,300) | 28,207) | 27,998) | 31,022) | 29,453) | 29,615) | 28,488) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to capital1 | 1.07 | 1.10 | 1.11 | 1.15 | 1.14 | 1.15 | 1.14 | 1.15 | 1.16 | 1.18 | 1.20 | 1.23 | 1.23 | 1.21 | 1.15 | 1.19 | 1.20 | 1.25 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 0.20 | 0.20 | 0.19 | 0.19 | 0.20 | 0.20 | 0.20 | 0.18 | 0.28 | 0.27 | 0.26 | 0.26 | 0.27 | 0.30 | — | — | — | — | ||||||
| Booking Holdings Inc. | 1.56 | 1.62 | 1.32 | 1.29 | 1.34 | 1.32 | 1.24 | 1.05 | 1.05 | 0.92 | 0.82 | 0.71 | 0.70 | 0.69 | 0.64 | 0.67 | 0.72 | 0.74 | ||||||
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
| DoorDash, Inc. | 0.23 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Starbucks Corp. | 1.96 | 1.92 | 1.92 | 2.04 | 2.18 | 2.35 | 2.08 | 2.18 | 2.22 | 2.39 | 2.37 | 2.34 | 2.21 | 2.34 | 1.57 | 1.87 | 2.09 | 1.99 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 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).
1 Q2 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 41,403 ÷ 38,643 = 1.07
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits fluctuations over the analyzed quarterly periods. Initially, the debt level was around 35.7 billion USD at the end of the first quarter of 2021, with a slight gradual decline observed through the first half of 2022. However, starting in the third quarter of 2022, the debt amount broadly increased, peaking near 41.4 billion USD by the middle of 2025. This upward trend towards the end of the timeframe indicates a sustained increase in the company's borrowing or liabilities.
- Total Capital
- Total capital showed variability over time, beginning at approximately 28.5 billion USD in the first quarter of 2021. The capital slightly fluctuated throughout 2021 and early 2022, followed by a general rising trend from late 2022 onwards, culminating at over 38.6 billion USD by mid-2025. This increase in total capital suggests growth in overall financing, combining debt and equity components.
- Debt to Capital Ratio
- The debt to capital ratio remained above 1.0 throughout the entire period, implying that total debt exceeded total capital, which is atypical as this ratio typically ranges between 0 and 1. The ratio started at 1.25 and displayed a consistent decline over the years, reaching approximately 1.07 by mid-2025. This gradual reduction indicates an improving capital structure with relatively less reliance on debt compared to capital, despite the increase in absolute debt figures. The persistent ratio above 1.0 may reflect the reporting method or classification specifics, possibly relating to how the components are accounted.
- Overall Analysis
- The financial trends indicate an increase in both debt and total capital over the observed quarterly periods. While debt levels rose significantly towards the later years, total capital also increased, with the debt to capital ratio decreasing, suggesting a modest improvement in financial leverage risk. The consistency in the debt to capital ratio remaining slightly above 1 indicates substantial debt presence relative to capital, emphasizing a capital structure that relies heavily on debt financing. Continuous monitoring of these ratios is advised to assess the sustainability of debt levels and associated financial risks.
Debt to Assets
McDonald’s Corp., debt to assets calculation (quarterly data)
| Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Short-term borrowings and current maturities of long-term debt | 602) | 80) | —) | 596) | —) | 604) | 2,192) | —) | —) | 524) | —) | —) | —) | —) | —) | 500) | 500) | 900) | ||||||
| Long-term debt, excluding current maturities | 40,801) | 38,845) | 38,424) | 38,990) | 38,524) | 36,764) | 37,153) | 37,275) | 35,710) | 36,604) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 34,628) | 34,923) | 34,823) | ||||||
| Total debt | 41,403) | 38,925) | 38,424) | 39,586) | 38,524) | 37,368) | 39,345) | 37,275) | 35,710) | 37,128) | 35,904) | 34,866) | 34,577) | 33,989) | 35,623) | 35,128) | 35,423) | 35,723) | ||||||
| Total assets | 59,555) | 56,329) | 55,182) | 56,172) | 53,801) | 53,513) | 56,147) | 52,089) | 50,442) | 52,014) | 50,436) | 48,502) | 49,248) | 50,878) | 53,854) | 52,727) | 51,893) | 51,103) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to assets1 | 0.70 | 0.69 | 0.70 | 0.70 | 0.72 | 0.70 | 0.70 | 0.72 | 0.71 | 0.71 | 0.71 | 0.72 | 0.70 | 0.67 | 0.66 | 0.67 | 0.68 | 0.70 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 0.07 | 0.08 | 0.10 | 0.09 | 0.08 | 0.08 | 0.10 | 0.09 | 0.09 | 0.10 | 0.12 | 0.12 | 0.10 | 0.12 | — | — | — | — | ||||||
| Booking Holdings Inc. | 0.60 | 0.59 | 0.60 | 0.58 | 0.59 | 0.61 | 0.58 | 0.54 | 0.53 | 0.48 | 0.49 | 0.42 | 0.39 | 0.44 | 0.46 | 0.47 | 0.51 | 0.58 | ||||||
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
| DoorDash, Inc. | 0.16 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | ||||||
| Starbucks Corp. | 0.49 | 0.49 | 0.50 | 0.52 | 0.53 | 0.51 | 0.52 | 0.54 | 0.54 | 0.53 | 0.54 | 0.54 | 0.55 | 0.51 | 0.47 | 0.50 | 0.52 | 0.53 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 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).
1 Q2 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 41,403 ÷ 59,555 = 0.70
2 Click competitor name to see calculations.
- Total Debt
- Over the observed period, total debt exhibited fluctuations with an overall upward trajectory. Starting near 35.7 billion US dollars at the first quarter of 2021, it dipped slightly by mid-2021 before gradually increasing through late 2022. The final quarters show a continued increase, reaching over 41 billion US dollars by the second quarter of 2025. This pattern suggests a consistent rise in debt levels, particularly pronounced from early 2023 onward.
- Total Assets
- Total assets initially increased steadily from approximately 51.1 billion US dollars in early 2021 to nearly 53.9 billion by the end of that year. However, the first half of 2022 saw a decline, bottoming around 48.5 billion, followed by recovery and growth through the remainder of the timeline. From 2023 forward, assets generally rose, reaching about 59.6 billion US dollars by mid-2025, indicating an expansion of the asset base despite earlier volatility.
- Debt to Assets Ratio
- The debt to assets ratio remained relatively stable but showed some variations within a narrow range. Starting at 0.7, it trended slightly downward to 0.66 by the end of 2021, suggesting a modest improvement in leverage. Subsequently, the ratio climbed back towards 0.7 and fluctuated around this level through 2022 and 2023. In the latest periods, it remained close to 0.7, reflecting a consistent balance between debt and assets despite changing absolute values of both metrics.
- Summary of Trends
- The company’s financial position over the periods analyzed demonstrates a strengthening asset base alongside increasing debt levels. Despite rising debt, the leverage ratio stability points to proportional growth in assets, mitigating potential risk from higher indebtedness. The data suggests prudent management of capital structure with attention to maintaining balanced leverage, though the upward trend in total debt warrants monitoring to assess sustainability relative to future asset growth.
Financial Leverage
McDonald’s Corp., financial leverage calculation (quarterly data)
| Jun 30, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Total assets | 59,555) | 56,329) | 55,182) | 56,172) | 53,801) | 53,513) | 56,147) | 52,089) | 50,442) | 52,014) | 50,436) | 48,502) | 49,248) | 50,878) | 53,854) | 52,727) | 51,893) | 51,103) | ||||||
| Shareholders’ equity (deficit) | (2,760) | (3,454) | (3,797) | (5,177) | (4,824) | (4,833) | (4,707) | (4,855) | (4,999) | (5,776) | (6,003) | (6,566) | (6,370) | (5,991) | (4,601) | (5,675) | (5,808) | (7,236) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Financial leverage1 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 3.47 | 3.16 | 2.49 | 2.61 | 3.29 | 3.11 | 2.53 | 2.35 | 4.19 | 3.78 | 2.88 | 2.90 | 3.63 | 3.60 | — | — | — | — | ||||||
| Booking Holdings Inc. | — | — | — | — | — | — | — | — | — | 23.47 | 9.12 | 6.01 | 6.12 | 5.12 | 3.83 | 4.21 | 4.98 | 4.97 | ||||||
| Chipotle Mexican Grill Inc. | 2.63 | 2.59 | 2.52 | 2.49 | 2.40 | 2.50 | 2.63 | 2.74 | 2.73 | 2.84 | 2.93 | 2.93 | 3.04 | 3.03 | 2.90 | 2.87 | 2.91 | 2.93 | ||||||
| DoorDash, Inc. | 1.90 | 1.62 | 1.65 | 1.62 | 1.65 | 1.64 | 1.59 | 1.53 | 1.50 | 1.48 | 1.45 | 1.40 | 1.34 | 1.47 | — | — | — | — | ||||||
| Starbucks Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 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).
1 Q2 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 59,555 ÷ -2,760 = —
2 Click competitor name to see calculations.
The analysis of the financial data reveals several noteworthy trends over the examined periods. Total assets demonstrate a generally positive trajectory, with fluctuations reflecting periodic decreases but an overall upward movement from around $51.1 billion to approximately $59.6 billion by the end of the period.
Shareholders’ equity exhibits a contrasting pattern. Initially, the equity position is significantly negative, indicating a deficit which shows some improvement over time. The deficit narrows from roughly -$7.2 billion to about -$2.8 billion, suggesting efforts toward strengthening the equity base, although it remains in a negative territory throughout the periods.
- Total Assets
- Total assets consistently hover around the $50 billion to $56 billion range with minor volatility. Notably, after a dip mid-period around mid-2022, assets recover and trend upwards, peaking near $59.6 billion by the last period ending June 30, 2025. This reflects either asset accumulation or revaluation contributing to balance sheet growth.
- Shareholders’ Equity (Deficit)
- The equity line, despite remaining negative, experiences gradual improvement. The deficit reduces by almost $4.5 billion across the timeline, culminating closer to -$2.8 billion. This negative equity signals ongoing challenges possibly linked to accumulated losses or adjustments but the narrowing trend suggests management may have taken corrective actions to bolster the capital structure.
Overall, the financial position demonstrates asset growth accompanied by a persistent, yet improving, equity deficit. This combination highlights a reliance on leverage or other liabilities that should be carefully monitored. The persistent negative shareholders’ equity, despite improvement, suggests structural financial considerations that could impact long-term solvency and risk profile.
Interest Coverage
McDonald’s Corp., interest coverage calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income | 2,253) | 1,868) | 2,017) | 2,255) | 2,022) | 1,929) | 2,039) | 2,317) | 2,310) | 1,802) | 1,903) | 1,982) | 1,188) | 1,104) | 1,639) | 2,150) | 2,219) | 1,537) | ||||||
| Add: Income tax expense | 608) | 462) | 521) | 588) | 533) | 480) | 476) | 606) | 506) | 465) | 436) | 555) | 221) | 437) | 469) | 542) | 157) | 416) | ||||||
| Add: Interest expense | 390) | 376) | 380) | 381) | 373) | 372) | 360) | 341) | 330) | 330) | 323) | 306) | 291) | 287) | 296) | 294) | 297) | 300) | ||||||
| Earnings before interest and tax (EBIT) | 3,251) | 2,706) | 2,918) | 3,224) | 2,928) | 2,781) | 2,875) | 3,264) | 3,147) | 2,597) | 2,662) | 2,842) | 1,700) | 1,829) | 2,403) | 2,985) | 2,673) | 2,253) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Interest coverage1 | 7.92 | 7.80 | 7.87 | 7.95 | 8.19 | 8.60 | 8.73 | 8.82 | 8.73 | 7.84 | 7.48 | 7.44 | 7.64 | 8.43 | 8.70 | 8.38 | 7.89 | 6.37 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||
| Booking Holdings Inc. | 4.16 | 4.91 | 6.63 | 7.16 | 7.79 | 7.63 | 7.11 | 8.82 | 9.14 | 10.82 | 11.03 | 11.24 | 7.95 | 3.94 | 5.39 | 3.50 | 3.03 | 3.59 | ||||||
| DoorDash, Inc. | — | — | — | — | — | — | — | -1,053.00 | -1,285.00 | -687.50 | -698.50 | -445.50 | -345.50 | -259.50 | — | — | — | — | ||||||
| Starbucks Corp. | 8.69 | 9.40 | 9.84 | 10.50 | 10.61 | 11.07 | 10.82 | 10.22 | 10.01 | 9.66 | 9.76 | 12.25 | 12.95 | 13.08 | 12.40 | 8.49 | 3.76 | 2.78 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 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).
1 Q2 2025 Calculation
Interest coverage
= (EBITQ2 2025
+ EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024)
÷ (Interest expenseQ2 2025
+ Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024)
= (3,251 + 2,706 + 2,918 + 3,224)
÷ (390 + 376 + 380 + 381)
= 7.92
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT values demonstrate a fluctuating pattern over the observed periods. Initially, there is an upward trend from the first quarter of 2021 through the third quarter of 2021, peaking at 2,985 million USD. This is followed by a decline in the fourth quarter of 2021 reaching 2,403 million USD and a significant drop in the first half of 2022 to around 1,700 to 1,829 million USD. From the third quarter of 2022 onward, EBIT generally recovers, showing an upward trend with some fluctuations, reaching a high of 3,264 million USD in the third quarter of 2023. The final periods indicate persistent volatility with values oscillating between approximately 2,700 and 3,250 million USD, reflecting varying operational performance quarter to quarter.
- Interest Expense
- Interest expense displays a gradual increasing trend throughout the entire timeframe. Beginning at 300 million USD in the first quarter of 2021, it remains relatively stable during the early periods but starts to increase consistently from late 2021 onward, reaching 390 million USD by the second quarter of 2025. This steady increase in interest costs suggests either rising borrowing levels or increased interest rates affecting financial expenses.
- Interest Coverage Ratio
- The interest coverage ratio, representing the ability to cover interest expenses with EBIT, shows variability but stays mostly above 6.0 throughout the period, indicating sufficient earnings to cover interest obligations. The ratio peaks around the fourth quarter of 2021 at 8.7 and generally remains strong, mostly fluctuating between approximately 7.4 and 8.8. Despite some minor downward trends after peak points, the ratio maintains a comfortable margin above 7.5 in most recent quarters, suggesting ongoing adequate operational earnings relative to interest expenses despite the rise in interest costs.