Calculate roi for geographic segments

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Calculate ROI for geographic segments; analyze results McDonald's Corp. McDonald's conducts operations worldwide and is managed in three primary geographic segments: America, Europe, and Asia/Pacific, Middle East and Africa (APMEA). A hybrid geographic/corporate segment (Other Countries and Corporate) reports on the results of Canada and Latin America as well as any unallocated amounts. McDonald's allocates resources to, and evaluates the performance of, its segments based on operating income. The asset totals disclosed by geography are directly managed by those regions and include accounts receivable, inventory, certain fixed assets, and certain other assets. Corporate assets primarily include cash and cash equivalents, investments, deferred tax assets, and other assets. Refer to the following geographic segment data (in millions) from the 2011 annual report of
McDonald's Corp

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Required:

a. Based on a cursory review of the data, can you identify any significant trends in the consolidated totals? Are there any notable trends in the data for specific business segments?

b. Using the DuPont model to show margin and turnover, calculate ROI for each of the three primary geographic segments for 2011. Round your percentage answers to one decimal place.

c. Looking only at the data presented here, which business segment appears to offer McDonald's Corp. the greatest potential for high returns in the future?

d. Comment about the difficulties you may encounter when attempting to interpret the Other Countries and Corporate segment results.

e. Can you think of any ways in which McDonald's could improve upon its classification of geographic segment data?

Reference no: EM13912285

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