Financial Analysis of McDonald's INTRODUCTION This research presents a fi

ASSESSMENT OF COMMON SIZE STATEMENTS

Common size statements are presented for (1) balance sheet, which may be found in Exhibit A, beginning on the following page (2) income, which may be found in Exhibit B, beginning on page 5, and (3) cash flow, which may be found in Exhibit C, page 7. All common size statements include data for fiscal years 1989, and 1988.

With respect to the common size balance sheets, most changes from 1988 to 1989 were relatively insignificant. The important changes were as follows:

1. Property increased by 1.3 percent (as a proportion of total assets). This change was positive.

2. Accounts payable decreased by 1.1 percent (as a proportion of total liabilities and equity). This change was positive.

Common Size Balance Sheet Comparison

McDonald's Corporation Fiscal 1988, 1989

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Item 1989 1988 Change

Cash, and equivalents 1.5% 2.2%  0.7%

. . .
0.5% + 0.2%    Total current 11.1% 12.3%  1.2% Longterm debt 42.5% 38.1% + 4.4% Security deposits 1.0% 1.1%  0.1% Deferred income taxes 6.7% 6.7% nc    Total liabilities 61.3% 58.2% + 3.1% Equity: Preferred stock 2.2% 0.0% + 2.2% ESOP note guarantee  2.2% 0.0%  2.2% Common stock 0.5% 0.6%  0.1% Additional paidin capital 1.7% 1.8%  0.1% Retained earnings 49.6% 48.2% + 1.4% Equity adjustment (foreign currency translation)  0.3% 0.1%  0.4% Treasury stock 12.8%  8.9%  3.9% 
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Approximate Word count = 1474
Approximate Pages = 6 (250 words per page)