Reference no: EM133555483

Problem: Perform a Financial Ratio Analysis for McDonald's

Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms' financial ratios, making detailed comparisons to industry averages and to previous periods of time. Financial ratio analyses provide vital input information for developing an IFE Matrix.

Note along the bottom row of the strategic planning template there is an icon Financial Ratios and also an icon Projected Financial Ratios. The template will thus calculate these ratios and give you the percentage change from 1 year to the next. However, as you know, ratios are calculated based on financial statements, so it is important in preparing a comprehensive strategic plan using the template to convert your company's existing financial statements into the template format. This is well worth the effort and is explained near the end of this chapter.

Instructions

I. Step I: Using the resources listed in Table 4-8, find as many of McDonald's financial ratios as possible. Record your sources. Report your research to your classmates and your professor.

II. Step II: Given the Template Considerations for Financial Ratios provided near the end of this chapter, try to convert McDonald's actual (most recent) financial statements into the template format, and get the template to then calculate associated financial ratios and changes year-over-year.