Reference no: EM131317491

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Brief Description:

McDonald's is the world's leading global food service retailer with over 36,000 locations in over 100 countries. More than 80% of McDonald's restaurants worldwide are owned and operated by independent local business men and women.  Franchisees and suppliers are the foundation of McDonald's long-term success in the fast food industry.

Overall Financial Status:

McDonalds' expense distribution (COGS making up most of the expense distribution) and capital structure (long-term loans) profitability and market ratio is expected and justified because of the nature of the industry and suggest that the company's financial position is favorable and does not show much risk to potential investors.  McDonalds' sales did show a significant gain between 2011 to 2012 and held steady with little fluctuation from 2012 to 2014.  Company sales did drop slightly in 2015, which could be a concern for investors, following further company historical analysis and data comparisons of other industry competitors. 

Specifics:

McDonalds' principal strengths include its global brand recognition and the strength of the alignment among the company, its franchisees, and suppliers (collectively referred to as the "System")[1].  The company's weaknesses seem to be the stagnant trend in sales and net income. The trend seems to be in decline. 

Recommendations:

One recommendation for McDonalds' continued success in the future is to look at how research and development might bring about new ideas that will make the company more innovative in the fast food industry.

[1] https://corporate.mcdonalds.com/content/mcd/investors/company-overview/company-overview-segment-information.html