Stock Analysis on Net

McDonald’s Corp. (NYSE:MCD)

Enterprise Value to FCFF (EV/FCFF) 

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

McDonald’s Corp., FCFF calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income 8,468,800 6,177,400 7,545,200 4,730,500 6,025,400
Net noncash charges 1,251,100 1,853,900 1,142,100 1,746,800 1,798,200
Changes in working capital items (108,000) (644,600) 454,200 (212,100) 298,500
Cash provided by operations 9,611,900 7,386,700 9,141,500 6,265,200 8,122,100
Interest paid, net of tax1 1,035,955 933,782 990,167 874,720 800,942
Capitalized interest, net of tax2 11,673 7,496 5,624 4,620 5,557
Capital expenditures (2,357,400) (1,899,200) (2,040,000) (1,640,800) (2,393,700)
Free cash flow to the firm (FCFF) 8,302,127 6,428,777 8,097,291 5,503,740 6,534,899

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the McDonald’s Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. McDonald’s Corp. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Interest Paid, Net of Tax

McDonald’s Corp., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR1 19.50% 21.10% 17.30% 23.00% 24.90%
Interest Paid, Net of Tax
Interest paid, before tax 1,286,900 1,183,500 1,197,300 1,136,000 1,066,500
Less: Interest paid, tax2 250,946 249,719 207,133 261,280 265,559
Interest paid, net of tax 1,035,955 933,782 990,167 874,720 800,942
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax 14,500 9,500 6,800 6,000 7,400
Less: Capitalized interest, tax3 2,828 2,005 1,176 1,380 1,843
Capitalized interest, net of tax 11,673 7,496 5,624 4,620 5,557

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 2023 Calculation
Interest paid, tax = Interest paid × EITR
= 1,286,900 × 19.50% = 250,946

3 2023 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 14,500 × 19.50% = 2,828


Enterprise Value to FCFF Ratio, Current

McDonald’s Corp., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in thousands)
Enterprise value (EV) 237,490,594
Free cash flow to the firm (FCFF) 8,302,127
Valuation Ratio
EV/FCFF 28.61
Benchmarks
EV/FCFF, Competitors1
Airbnb Inc. 24.91
Booking Holdings Inc. 15.60
Carnival Corp. & plc 14.25
Chipotle Mexican Grill Inc. 61.14
Starbucks Corp. 28.08
EV/FCFF, Sector
Consumer Services 24.42
EV/FCFF, Industry
Consumer Discretionary 32.89

Based on: 10-K (reporting date: 2023-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

McDonald’s Corp., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1 250,010,976 227,522,516 213,114,063 191,545,606 189,897,042
Free cash flow to the firm (FCFF)2 8,302,127 6,428,777 8,097,291 5,503,740 6,534,899
Valuation Ratio
EV/FCFF3 30.11 35.39 26.32 34.80 29.06
Benchmarks
EV/FCFF, Competitors4
Airbnb Inc. 23.35 22.46 42.36
Booking Holdings Inc. 17.62 14.11 36.39 15.01
Carnival Corp. & plc 14.11 175.24
Chipotle Mexican Grill Inc. 57.71 51.52 50.61 146.38 56.84
Starbucks Corp. 32.25 42.44 28.09 281.97 30.98
EV/FCFF, Sector
Consumer Services 25.62 42.27 56.26 28.28
EV/FCFF, Industry
Consumer Discretionary 32.37 55.70 66.77 52.40 31.02

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 See details »

3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 250,010,976 ÷ 8,302,127 = 30.11

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. McDonald’s Corp. EV/FCFF ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.