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Mc Donald’s Group 3 1.Le Thi Thuy Linh 2.Tu Ngoc Hinh 3.Pham Thanh An 4.Nguyen Thi My Hang.

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Presentation on theme: "Mc Donald’s Group 3 1.Le Thi Thuy Linh 2.Tu Ngoc Hinh 3.Pham Thanh An 4.Nguyen Thi My Hang."— Presentation transcript:

1 Mc Donald’s Group 3 1.Le Thi Thuy Linh 2.Tu Ngoc Hinh 3.Pham Thanh An 4.Nguyen Thi My Hang

2 Recomendation Conclusion Ratios analysis Common size Introduction Content

3 Introduction 1. History NameMcDonald's Corporation Industries served Restaurants, Food Geographic areas servedWorldwide HeadquartersU.S. Current CEODon Thompson Revenue$ 27.56 billion (2012) Profit $ 5.46 billion (2012) Employees1,800,000 (2013) McDonald’s is the world’s leading fast food restaurant chain with more than 34,000 local restaurants serving approximately 69 million people in 119 countries each day.

4 Introduction 2. Product of Mc Donald’s Delicious, freshly made, and oh-so- satisfying. From the Big Mac to our Premium Grilled Chicken Club to our classic Cheeseburger, McDonald’s sandwiches make the meal From our ever-popular Chicken McNuggets, our fabulously fresh salads or the classic Filet-O-Fish, both chicken and fish from McDonald’s are delicious choices.  Burger  Chicken, fish and pork

5 Introduction From wholesome choices like Fruit & Maple Oatmeal and the Egg White Delight McMuffin to the savory Sausage Biscuit to the sweet McGriddles sandwich No meal is complete without a drink! From Diet Coke to low-fat milk to fresh-brewed hot coffee The McFlurry is a soft-serve ice cream dessert, that has pieces of candy or cookies mixed into it  Breakfast  Beverages  Desserts and Shakes

6 3. Mc Donald’s in Viet Nam In 10/02/2014, McDonald's Corporation opened the first restaurant in Vietnam. Strategically located at the busy roundabout at intersection of Dien Bien Phu and Nguyen Binh Khiem Streets in District 1. McDonald's 350-seat restaurant. With a total floor area more than 1,300 square meters on a property close to 3,000 square meters, the restaurant is designed as a modern dining destination Introduction

7 4. Competitors Introduction Competition for McDonald’s is mainly due to demand and choices, prices, and nutrition values. Demand and choices play roles in competition because fast food companies have to create a wide variety menu to satisfy all customers. If one restaurant has more variety and innovation on the menu, consumers are more likely to go to that restaurant. We choose the Burger King is the main competitor of McDonald’s that we can compare them together. The reason why we choose it because same as McDonald, Burger King also had a longer history, it appeared in 1954 and now it has about 11 million customers over the world

8  Focus on plan to win to attract customers and expansion in other countries  Expansion in market share by more investments in Asia  S-O Strategies  Minimize customers losses by provide low cost menu and discounts  W-T Strategies  More control on franchise dealers to maintain McDonald’s reputation and quality.  Provide new product and keep innovation  S-T Strategies  Not use Trans fat in all worldwide McDonald's  Replace the production components cans into an environment – friendly material  W-T Strategies SWOT Introduction 5. Analysis SWOT

9 Common size Income Statement (%) 201120122013 MDBKMDBKMDBK Sales100 COGS60.4360.6860.7653.2961.2119.58 Gross profit51.2420.3351.0929.7451.7161.82 EBIT31.5821.3431.2126.9631.1851.28 Interest expense 1.829.691.8711.361.8617.45 EBT31.5811.6531.2115.6131.1833.83 Net Income20.383.7719.825.9719.8720.39

10 Common size Balance sheet (%) 201120122013 MDBKMDBKMDBK Cash7.088.226.609.837.6413.50 Account receivable4.052.743.893.223.603.08 Inventory0.350.250.340.120.340.02 Current asset13.3512.9413.9116.0013.7918.43 Non-current asset17.441.9916.353.1915.916.24 Total asset100 Account payable2.911.763.231.232.970.53 Current liabilities10.648.449.627.158.655.94 Equity43.6225.9643.2221.1243.7126.01 Total Liabilities & equity 100

11 Common size Cash flow (%) Consolidated Statement of Cash flow Year201120122013 Cash provided by operation7150.16966.17120.7 Cash used for investing activities(2570.9)(3167.3)(2673.8) Cash used for financing activities(4533.0)(3849.8)(4043.0)

12 Ratios analysis 01. Activity Ratios - Short-term activity ratios - Long-term activity ratios Our group focused to analyze 4 ratios to understand all McDonald’s financial situation 02. Liquidity ratios - Current ratio - Quick ratio - Cash from operation ratio - Description of the contents 03. Long-term debt and solvency ratios - Debt to total capital - Debt to equity - Time interest earned - Financial leverage 04. Profitability ratios - Net profit margin - Gross profit margin - ROS - ROA - ROE

13 Activity ratios

14 Activity ratios (cont.) Because of McDonald’s is the merchandise company so most of inventories of company only focus on finished goods. 1. Short-term activity ratios 1.1 The inventory turnover ratios Data of Inventory of McDonald’s from 2010 to 2013 Year2010201120122013 Inventories (million)109.9116.8121.7123.7 Average Inventories 113.35119.25122.7

15 Activity ratios (cont.)

16 1. Short-term activity ratios 1.2. Average number of day inventory in stock

17 Activity ratios (cont.) 1. Short-term activity ratios 1.3. The receivable turnover Data of Receivable of McDonald’s from 2010 to 2013 Year201020112012 Account receivable (million) 1,179.11,334.71,375.3 Average account receivable 1256.91355

18 Activity ratios (cont.)

19 1. Short-term activity ratios 1.4. Average number of day receivable outstanding

20 Activity ratios (cont.) 1. Short-term activity ratios 1.5. Working capital turnover YearCurrent assetsCurrent LiabilitiesNet working capital 20114,403.0 3,509.2 893.8 20124,922.1 3,403.1 1519.0 20135,050.1 3,170.0 1880.1

21 Activity ratios (cont.)

22 1. Short-term activity ratios 1.6. Payable turnover Data of Account Payable of McDonald’s from 2010 to 2013 Year201020112012 Account payable (million)943.9961.31,141.9 Average account payable 952.61051.6 Inventories Begin Inventories PurchasesCOGS Ending Inventories So: Purchase = Ending inventories + COGS – Begin Inventories

23 Activity ratios (cont.)

24 1. Short-term activity ratios 1.7. Number of days of payable

25 Activity ratios (cont.) 2. Long-term activity ratios 2.1. Asset turnover Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s0.78060.80630.8314 Burger King0.20120.35360.4154 According to Income statement of McDonald’s, our group finds out that most of total asset of McDonald’s also come from Net property plant and equipment

26 Activity ratios (cont.)

27 2. Long-term activity ratios 2.2. Fixed asset turnover Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s1.11481.16041.2031 Burger King1.35922.06192.1897

28 Activity ratios (cont.)

29 Liquidity ratios Liquidity analysis

30 Liquidity ratios (cont.) 1. Current ratio Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s1.5931.4461.255 Burger King3.10522.23861.5328

31 Liquidity ratios(cont.)

32 2. Quick ratio Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s1.5541.4111.221 Burger King3.10172.22171.5037

33 Liquidity ratios(cont.)

34 3. Cash ratio Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s0.88290.68650.6656 Burger King0.97311.37432.2743

35 Liquidity ratios(cont.)

36 4. Cash from operation ratio Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s2.2392.0572.052 Burger King0.93990.56410.8615

37 Liquidity ratios(cont.)

38 Long-term debt and solvency ratio Long-term debt and solvency analysis

39 Long-term debt and solvency ratio (cont.) 1. Debt to total capital Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s0.47 0.46 Burger King 169.109862.521450.3569

40 Long-term debt and solvency ratio (cont.)

41 2. Debt to equity Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s0.1980.2230.244 Burger King2.84413.73532.8528

42 Long-term debt and solvency ratio (cont.)

43 3. Time interest earned Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s16.7216.6417.26 Burger King2.20292.37442.9390

44 Long-term debt and solvency ratio (cont.)

45 4. Financial leverage Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s2.28782.31382.2925 Burger King3.84414.73533.8528

46 Long-term debt and solvency ratio (cont.)

47 Profitability ratio Profitability analysis

48 Profitability ratio (cont.) 1. Net profit margin Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s19.89%19.82%20.38% Burger King20.39%5.97%3.77%

49 Profitability ratio (cont.)

50 2. Gross profit margin Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s51.71%51.09%51.24% Burger King61.82%29.74%20.33%

51 Profitability ratio (cont.)

52 3. ROS Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s19.89%19.82%20.38% Burger King20.39%5.97%3.77%

53 Profitability ratio (cont.)

54 4. ROA Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s15.52%15.98%16.94% Burger King4.10%2.11%1.56%

55 Profitability ratio (cont.)

56 5. ROE Dec 31, 2013Dec 31, 2012Dec 31, 2011 McDonald’s35.71%36.82%37.92% Burger King17.37%8.97%6.09%

57 Profitability ratio (cont.)

58 Dupont ROE=ROAx Leverag e Dec 31, 2013 35.51%15.52%2.2878 Dec 31, 2012 36.97%15.98%2.3138 Dec 31, 2011 38.83%16.94%2.2925 Two-component disaggregation of ROE

59 Dupont ROE= Net profit margin x Asset turnov er x Levera ge Dec 31, 2013 35.52%19.89%0.78062.2878 Dec 31, 2012 36.97%19.82%0.80632.3138 Dec 31, 2011 38.84%20.38%0.83142.2925 Three-component disaggregation of ROE

60 Recommendation  The investors should concern in investing McDonald’s because: Both of their revenue and net profit were increasing significantly with a stable growth in the future. Strong finance situation: -use less debt in total asset -both of current ratio and quick ratio also higher than 1 -The amounts of cash reserve are also high

61 Conclusion McDonald still doesn’t have competitors in fast food factor. Most of ratios also are higher and equal to benchmark and McDonald’s have been maintained their ratios throughout from 2011 to 2013 McDonald’s should improve their Dupont ratios

62

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