Price to FCFE (P/FCFE)
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
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Free Cash Flow to Equity (FCFE)
McDonald’s Corp., FCFE calculation
US$ in millions
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).
The financial information reveals fluctuations in both cash provided by operations and free cash flow to equity over the five-year period. Cash provided by operations demonstrates an initial decline followed by recovery and growth, while free cash flow to equity exhibits a more pronounced pattern of variability.
- Cash Provided by Operations
- Cash provided by operations decreased from US$9,142 million in 2021 to US$7,387 million in 2022, representing a decline of approximately 19.2%. A subsequent recovery is observed in 2023, with cash from operations increasing to US$9,612 million. This upward trend continues into 2024, reaching US$9,447 million, before further increasing to US$10,551 million in 2025. Overall, cash provided by operations demonstrates a positive trend from 2022 to 2025, although it does not surpass the 2021 level until 2025.
- Free Cash Flow to Equity (FCFE)
- Free cash flow to equity shows a more volatile pattern. It begins at US$6,031 million in 2021 and increases to US$6,685 million in 2022, a growth of approximately 10.9%. A significant increase is then observed in 2023, with FCFE reaching US$10,247 million. However, this is followed by a substantial decrease in 2024, falling to US$6,601 million. The trend stabilizes somewhat in 2025, with FCFE reported at US$7,114 million. The 2024 value represents a considerable reduction from the 2023 peak, but remains above the 2021 and 2022 levels.
- Relationship between Metrics
- While both metrics generally move in the same direction, the magnitude of change differs. The increase in cash provided by operations from 2021 to 2023 does not translate into a proportional increase in FCFE, suggesting that factors beyond operational cash flow, such as debt repayment or equity issuance, are influencing FCFE. The significant drop in FCFE in 2024, despite relatively stable cash from operations, warrants further investigation to understand the underlying drivers.
The observed fluctuations in free cash flow to equity suggest potential variability in the company’s ability to fund discretionary activities, such as dividends, share repurchases, or strategic investments. The divergence between the trends in cash from operations and FCFE highlights the importance of examining the components of FCFE calculation to gain a more complete understanding of the company’s financial health.
Price to FCFE Ratio, Current
McDonald’s Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Airbnb Inc. | |
| Booking Holdings Inc. | |
| Chipotle Mexican Grill Inc. | |
| DoorDash, Inc. | |
| Starbucks Corp. | |
| P/FCFE, Sector | |
| Consumer Services | |
| P/FCFE, Industry | |
| Consumer Discretionary | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
McDonald’s Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| Starbucks Corp. | ||||||
| P/FCFE, Sector | ||||||
| Consumer Services | ||||||
| P/FCFE, Industry | ||||||
| Consumer Discretionary | ||||||
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 Data adjusted for splits and stock dividends.
3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of McDonald’s Corp. Annual Report.
5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibited fluctuations over the five-year period. Share price demonstrated a consistent upward trajectory, while Free Cash Flow to Equity per share experienced more variability. Consequently, the P/FCFE ratio showed a complex pattern of decline, increase, and stabilization.
- Share Price
- Share price increased steadily from US$245.03 in 2021 to US$333.05 in 2025, indicating positive investor sentiment and growth expectations over the period. The rate of increase appeared relatively consistent year-over-year.
- Free Cash Flow to Equity per Share
- FCFE per share increased from US$8.11 in 2021 to US$9.14 in 2022. A significant increase was observed in 2023, reaching US$14.19. However, FCFE per share decreased to US$9.24 in 2024 before modestly recovering to US$10.01 in 2025. This suggests potential volatility in the company’s ability to generate cash available to equity holders.
- Price to FCFE Ratio
- The P/FCFE ratio decreased from 30.21 in 2021 to 28.85 in 2022, reflecting the increase in FCFE per share. A substantial decline occurred in 2023, with the ratio falling to 20.85, driven by the significant rise in FCFE per share. The ratio then increased sharply to 33.63 in 2024, coinciding with the decrease in FCFE per share. The ratio stabilized at 33.26 in 2025. This pattern suggests that changes in FCFE per share have a considerable impact on the P/FCFE ratio, and the ratio’s movement does not strictly follow the share price trend.
The observed fluctuations in the P/FCFE ratio warrant further investigation. The decrease in 2023 could indicate the market perceived the higher FCFE as unsustainable, while the subsequent increase in 2024, despite a share price increase, suggests a potential shift in investor valuation relative to cash flow generation.