Mcdonald Uses Using Fifo Method For Accounting Purpose

1352 Words6 Pages
McDonalds Company functions in a global restaurant industry, where it franchises and operates restaurants. The revenue of the company consist of fees from franchised restaurants and also from the sales generated from the company operated restaurants. Management of the company examines results on constant currency basis which excludes the effect of the foreign currency and considers average exchange rate of the prior year to calculate. Company do not record any transaction related to the sale or purchase of the franchisees business in the consolidated financial statements. The company operates on diversified geographic segment and equity method where investment 50% or less i.e. Australia, China and Japan. Company regularly checks the fair…show more content…
In order to achieve these strategies company undertakes a 5 P’s integrated approach to people, products, place, price and promotion. Company relies on its ability to continue to innovate and reinvesting in the restaurants to develop them according to system plans for world-wide growth, being consistent in providing excellent customer service and clean and friendly environment which enriches customers experience and create an overall difference that balances profitability with value. “The Golden Arches Logo” and “McDonald’s” are the trademarks which are considered to be of great value to the company. The logo is well known globally and represents strong brand image. While making capital allocation decisions, company prioritize the spending on enriching customer’s experience through which it can achieve sustainable long-term growth in sales and market share. Company aims for markets which have strong returns and help company to succeed in achieving long-term growth. In 2014, China and Japan markets were negatively affected due to food quality issues discovered in McDonald’s supplier, which resulted into loss of sales and profitability and also incurring expense to gain back customers confidence and trust. Any such future instance could negatively the affect business profitability, its reputation and overall brand image. Also,

More about Mcdonald Uses Using Fifo Method For Accounting Purpose

Open Document