Case Study On Company Financials

Choose a publicly held company and, using the Internet, review its most current annual report. Evaluate the health of the corporation you picked based upon your analysis of its financial statements: balance sheets, income statements, cash flow statements, and statements of shareholders’ equity. Then, research a similar sized competitor for comparison.
Write a 3–4 page report suggesting ways to improve the company’s financial health.

Case Study On Company Financials

The global financial success that is McDonald’s along with Wendy’s is discussed and contrasted in the following article. The balance sheet, income statement and cash flow statement and the statement of equity of shareholders were used to calculate the different ratios of financials. McDonald’s along with Wendy’s are among the most well-known and well-known fast-food chains.

Horizontal Analysis

Since the year 2016, McDonald’s liabilities have outpaced its assets, which is a indicator of financial difficulties that could hinder the expansion plans of the company. The assets at the time of 2021 stood at $7,148.5 million, which is more than the liabilities currently at $4,020 million. Positive working capital means that the company’s assets outstrip the current obligations. If a company has enough cash reserves, the company will be able to pay off its short-term loans when they are due to mature in the next 12 months.

At the time of 2016 when they hit a high at $24,621,900, the sales at McDonald’s fell at McDonald’s. In contrast, 2021’s sales of $23,222,900 was an enormous increase over the prior year. The company’s cash reserves fell to $2.46 billion at the end of 2017 and $0.89 billion in the year 2019 (Benlamalih and Nobanee, 2020). A trend of rising was observed through the years, and in 2021, the cash reserves were at $4.7b. The pattern was increasing in receivables until the year 2019 in which there was an 0.9 percentage decrease in receivables from last year that has continued to decrease in the years since.

Analysis of verticals

Statement of income

In the millions

  2020 10% of 2020 2021 2021 %
Revenue 19,207 100% 23,222 100%
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