Mcdonalds And Wendys Financial Statement Analysis

The current ratio measures the company’s ability to pay its short term obligations with its short term assets. Between Coca Cola and PepsiCo, PepsiCo has a higher current ratio implying that is more capable of paying its obligations. The debt management policies of Coca-Cola in conjunction with share repurchase program and investment activity resulted in current liabilities exceeding current assets. From the ratio Pepsi Co suddenly had to pay all its short-term

Companies with the most consistent earnings history or strongest growth prospects receive the highest P/E multiples. We calculate price targets for the current and next fiscal year by applying the stock 's current multiple to the average professional analyst 's estimate. Valuation using RadioShack 's current multiple (P/E): Fiscal Year

Debt ratio - The Debt/Equity ratio is a measure of a company 's financial leverage and indicates what proportion of equity and debt the company is using to finance its

6. Debt Ratio: This nifty ratio is found by taking total debt over/divided by total assets. This directly shows the amount of debt a company has relative to its assets.

Current ratio shows how well the company can pay off its short-term liability obligations. Short-term liabilities are debt due within the next year. Companies that have larger amounts of current assets are better able to pay off their current liabilities. The higher the ratio, the better able the company is to pay current obligations. A low ratio indicates the company is weighted down with current debt and the cash flow will suffer. The equation for current ratio

Price-earnings Ratio: measures market value relative to earning by dividing market price per common share by earnings per share.

Current ratio shows that two companies may in a favorable position to obtain short-term credit, but current ratio does not consider the types of current assets these two companies has and how easily they can be turned into cash. Kohl’s has a stronger quick ratio than Dillard’s, indicating that Kohl’s has a little stronger “instant” debt-paying ability than Dillard’s. In other words, Kohl’s has a better ability to convert assets into cash than Dillard’s.

The two companies that I will be comparing in this project are McDonalds and Wendys. Both of these companies are competitors in the same industry. I am using the information from their 2005 Financial Statements.

Lawsons 2010 and 2011 current ratio are above the industry average (1.8:1) however in 2012 the current ratio falls below the industry average at 1.55:1 and than again in 2013 to 1.02:1. This indicates that the company’s ability to pay its debts is

Competitor's Ratios and Analysis. Using relative comparative analysis (Table 6), competing firms Google and Amazon have unique performance over fiscal years (FY) 2014-2016. Measuring profit performance using profitability ratios, Google has a greater gross profit margin than Apple and retains an average of 61 cents for every dollar spent on direct sales. However, Apple outperforms Google on both return on assets and return on equity ratios. Meaning, Apple retains 14 cents for every dollar in assets in comparison to Google’s 11 cent retained average. In addition, Apple retains a net average of 35 cents for every dollar invested by common shareholders.

The quick ratio reflects on a company’s ability to meet its current liabilities without liquidating inventories that could require markdowns. It is a more stringent test of liquidity than the current ratio and may provide more insight into company liquidity in some cases. For Colgate-Palmolive, the quick ratio has declined from 0.73 in 2008 to 0.58 in 2010. While this does not necessarily mean a problem, a higher current ratio and quick ratio analysis will mean that the company will not have difficulty in meeting its short-term obligations from its operations and not by liquidating its assets.

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.

Debt ratio helps in comparing total assets and total liabilities. If you have more liabilities it means you have lesser equity and therefore an increased leverage position.

The PE ratio is obtained by dividing current market price of share by its earnings per share.

Company D has higher current ratio and quick ratio which is higher 2.43x and 2.3x respectively. This was because Company D had higher cash and short term investment which was 55.6% while Company C only has 1.4%. It proves that Company D is financially conservative and it matches with the second described company.