Paying users zone. Data is covered by 
.
Get to McDonald’s Corp. for $19.99, or
get to entire website for at least 3 months from $49.99.
Short-term (Operating) Activity Analysis
Difficulty: Beginner
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
McDonald’s Corp., short-term (operating) activity ratios
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | McDonald’s Corp.’s inventory turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | McDonald’s Corp.’s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | McDonald’s Corp.’s payables turnover increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | McDonald’s Corp.’s working capital turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | McDonald’s Corp.’s average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | McDonald’s Corp.’s operating cycle deteriorated from 2015 to 2016 and from 2016 to 2017. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | McDonald’s Corp.’s average payables payment period declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | McDonald’s Corp.’s cash conversion cycle deteriorated from 2015 to 2016 and from 2016 to 2017. |
Inventory Turnover
McDonald’s Corp., inventory turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Inventory turnover = Company-operated restaurant expenses ÷ Inventories, at cost, not in excess of market
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | McDonald’s Corp.’s inventory turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
Receivables Turnover
McDonald’s Corp., receivables turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Receivables turnover = Sales by Company-operated restaurants ÷ Accounts and notes receivable
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | McDonald’s Corp.’s receivables turnover deteriorated from 2015 to 2016 and from 2016 to 2017. |
Payables Turnover
McDonald’s Corp., payables turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Payables turnover = Company-operated restaurant expenses ÷ Accounts payable
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | McDonald’s Corp.’s payables turnover increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
Working Capital Turnover
McDonald’s Corp., working capital turnover calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Working capital turnover = Sales by Company-operated restaurants ÷ Working capital
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | McDonald’s Corp.’s working capital turnover improved from 2015 to 2016 but then slightly deteriorated from 2016 to 2017 not reaching 2015 level. |
Average Inventory Processing Period
McDonald’s Corp., average inventory processing period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Average Receivable Collection Period
McDonald’s Corp., average receivable collection period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | McDonald’s Corp.’s average receivable collection period deteriorated from 2015 to 2016 and from 2016 to 2017. |
Operating Cycle
McDonald’s Corp., operating cycle calculation, comparison to benchmarks
No. of days
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Operating cycle = Average inventory processing period + Average receivable collection period
= + =
| Ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | McDonald’s Corp.’s operating cycle deteriorated from 2015 to 2016 and from 2016 to 2017. |
Average Payables Payment Period
McDonald’s Corp., average payables payment period calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
| Ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | McDonald’s Corp.’s average payables payment period declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level. |
Cash Conversion Cycle
McDonald’s Corp., cash conversion cycle calculation, comparison to benchmarks
No. of days
Based on: 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24), 10-K (filing date: 2014-02-24).
2017 Calculations
1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
| Ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | McDonald’s Corp.’s cash conversion cycle deteriorated from 2015 to 2016 and from 2016 to 2017. |
