Comparing The Financial Ratios And Statements From Mcdonald's And Wendy's

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Introduction The restaurant industry “operates restaurants and other eating places, including full-service restaurants, quick-service restaurants, cafeterias, buffets, and snack bars” (Restaurants). The fast food sector has a number of popular companies like McDonald’s and Wendy’s. Fast food chains earn the majority of their success by offering quick, inexpensive meals made uniformly around the world (Nath). This project will be focused on comparing the financial ratios and statements from McDonald’s (MCD) and Wendy’s (WEN). The analysis will take an unbiased approach when comparing the companies. The comprehensive analysis will include: the company’s financial statements, including the balance sheets, income statements, and statement of cash flows, calculating the financial ratios, deciding which external factors could influence the company’s profits, and finally making a recommendation on which stock will have a positive effect on a potential investor’s portfolio. Time Series Analysis In this section we will analyze the financial ratios that have changed significantly over time. There will be raw numbers provided in this section to show how the ratios have changed over the three-year period being analyzed. McDonald’s Profitability Ratios: McDonald’s return on common equity (ROCE) has decreased by 4% during the three-year period. The ROCE measures the company’s ability to generate profits from its shareholders’ investments in the company. The ROCE could have been

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