Most anyone driving with a young child in their car is familiar with McDonalds. Once that child sees those trademark golden arches out the car window, you will likely be stopping in for a happy meal with a toy inside. But does this mean that the company is a good investment for your hard earned money? That is what we will explore in this paper. We will look into the stock and financial statements of McDonalds and their closest competitors to do a comparison and find out if brand recognition is a good indicator to whether the company is successful and to know if it is a good idea to buy stock in the McDonalds’ company.
McDonalds is a well-known publicly traded company within the restaurant and bar industry. The company was founded by Raymond Albert Kroc on April 15, 1955 and has grown to over thirty three thousand restaurants in one hundred and eighteen countries since the creation (Rosenberg, 2014). McDonalds is part of the customer service sector since they provide services to the public in the form of mainly food and drink and the services they provide are gift cards, free wifi and playplace and parties. On its tenth anniversary, McDonalds had its first public stock offering at $22.50 per share (McDonalds History, 2014). Only two years later in 1967, McDonalds opened its first international restaurants in Canada and Puerto Rico, expanding to Spain, Denmark and the Philippines by 1981. The beloved founded Ray Kroc died in January of 1984 and by 1988, Fortune Magazine names McDonalds hamburgers among the 100 products America makes best.
Ray Kroc met the McDonalds brothers with their small restaurant business in 1954. He noticed how effective their business was and wanted to expand on it. From there he built a multi-million dol...
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The corporation I chose to discuss is McDonald’s. McDonald’s is a publicly traded corporation that includes the following domestic companies, McDonald’s, Chipotle Mexican Grill, and Boston Market. This paper will discuss the following:
Introduction The purpose of this report is to undertake financial analysis of the position of the three major supermarket chains (Tesco plc, Morrison plc and Sainsbury plc) in the UK, using the financial tools such as Horizontal and Vertical Analysis and Ratio Analysis. The calculations done are considering the figures from the income statement and balance sheet of these three companies for the last 2 years (2008 & 2007). Doing these calculations is an effort to find out the current position and if any forecast on their performance. Tesco Plc *Interpreting the Horizontal and Vertical *Analysis The balance sheet’s horizontal analysis reveals the first worrying statistics about the company- the fact that stock level has increased by 25.84% in the year, even though net assets have increased by only 12.59%. The vertical analysis of the balance sheet again highlights the increase in amount of stock held by the company at the end of 2008 and increase in current assets. Interpreting the Ratio Analysis By looking at the ROCE* ratio it is clear that the business has not generated any higher return in the period 2007-2008. Though there is a marginal decrease in the returns (0.14% from 0.16%), however when compared with returns of other competitors Tesco plc has performed much better. Drop in asset utilisation ratio in the year 2008 indicates that the company did not use its assets efficiently to generate sales. As a result profit margin dropped down to 5.91% in 2008 from 6.21% in the year 2007. The Acid test ratio also doesn’t meet the ‘ideal’ ratio of 1:1. In other words Tesco had only 38p of quickly realisable assets to meet each £1 of current liabilities. Stock turn shows the effect of increased stock at the end of 2008 as it s...
It has been noticed throughout the running of McDonald’s that they tend to market to the eyes of children with Ronald McDonald as their notorious “spokesclown” that is recognized by 96% of American children. Also, in 1998, McDonald’s signed a long-term deal with the Walt Disney Company to include Disney merchandise as giveaways in its Happy Meals.
As a company, McDonald’s was first introduced in Des Plaines, Illinois in 1955. This was the very first McDonald’s restaurant, which all started in San Bernardino, California in 1954 when Ray Kroc approached the McDonald brothers with a business proposition to start a new company. In 1965 McDonald’s went public and was later, in 1985 added to the Dow Jones Industrial Average. (www.mcdonalds.com) The company has gone through quite a few changes with its changing CEO’s over the years, but the company seems to be on track with CEO Jim Skinner, named in 2004. Skinner was named the new CEO just in time to clean up after McDonald’s first ever quarterly loss. He succeeded by showing that McDonald’s revenue had climbed 11% during 2006 and net profits had climbed 36%. (Dess, Case 40 Pg. 1)
While peddling about the country he came in contact with the super efficient McDonald's hamburger joint, which was started by Dick and Mac McDonald, who were brothers. He saw this place and optimistically envisioned many more opening up all over the country. He convinced the brothers to let him be their first franchisee. They agreed so in 1954 Ray opened up the first McDonalds franchise. A year later, Ray opened up the second McDonalds franchise in Des Plaines, Illinois. Only four years after the second restaurant's opening the one hundredth McDonalds was opened. In 1961 Ray Kroc bought the rights to the McDonalds franchise for a meager 2.7 million dollars. To pay this massive sum at the time he had to mortgage his house and take out numerous loans that would eventually cost him 14 million to pay back. After he bought the rights to the name and the company he forced Dick and Mac to remove their name from their original restaurant. But he went even further when he opened up a McDonalds restaurant a block down the road trying to put them out of business. Also that same year Hamburger University was opened.
Everyone has heard of McDonald’s, but where did this familiar name come from? When people think of American food, it is not uncommon for two golden arches to appear in their minds. This story began with two brothers Dick and Mac McDonald who owned and ran a small restaurant in San Bernardino, California during the 1940s. In 1954 a man named Ray Kroc came across these two brothers while selling multi-mixers and was impressed with the business they were running. The menu was compact, listing options for only a few burgers, fries and beverages, but the restaurant was effective in its operation. Ray Kroc pitched the idea of spreading McDonald’s restaurants across the United States and in 1955 he founded the McDonald’s Corporation. By 1960 he bought the exclusive rights to the name. Kroc was able to expand substantially on this small business so that by 1958 McDonald’s sold its 100 millionth hamburger. (“McDonald’s.com”)
According to Royle (1999) McDonald’s is a very large multinational enterprise (MNE) and the largest food service operation in the world. Currently the company has 1.5 million workers with 23,500 stores in over 110 countries with the United Kingdom and Germany amongst the corporation’s six biggest markets, and over 12,000 restaurants in the United States. In 1974 the United Kingdom corporation was established and in 1971 the Germany corporation was established, currently the combined corporation has over 900 restaurants and close to 50,000 employees in each of these countries (Royle, 1999).
McDonalds traditional competitors include many of the other fast food outlets across the country, i.e. Burger King, Taco Bell, KFC, Wendy’s. It has been shown by Professor Michael Waterson (2004) that the presence of a Burger King, for example, will increase the likelihood that McDonalds will open near by. Thus it can be seen that the threat of competition from traditi...
The main target customer for McDonald's includes parents with young children, young children, business customers, and teenagers. Perhaps the most obvious marketing for McDonald's is its' marketing towards children and the parents of young children. Ronald McDonald was first introduced in 1963 and marked the beginning of their focus on young children as a critical part of their ongoing business. Parents like to visit McDonald's because it is a treat for the kids, and the kids enjoy the cartoon like atmosphere. McDonald's also targets business customers as a part of their core business. Business customers may stop during the workday and can count on fast service, and consistently good food. Another major target of McDonald's marketing is to teens. Teens find the value menu especially appealing and McDonald's markets their restaurants as a cool place to meet with their friends and to work (The Times 100).
The McDonald's Corporation is the largest chain of fast food restaurants in the world. It is franchised in over 119 countries and serves an average of 68 million customers daily. The company started in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald in the United States. They reorganized their business as a hamburger stand in 1948. In 1955, Businessman Ray Kroc joined the company as a franchise agent. He purchased the chain from the McDonald brothers and oversaw its global-wide growth (McDonald’s 2014).
He saw how much potential the restaurant has, so he bought it out and opened one of the first franchises. Within the first year of Ray Kroc buying it, there were one hundred and two locations all around the world. McDonalds currently is one of the largest fast food restaurants in the world and currently has served over sixty four million customers through one of their thirty two thousand sites. It has almost become a way of life for America. Though, McDonalds started off as a small business between two brothers, it grew into one of the largest restaurant franchises in the world and greatly affects our society and how we eat our food.
Mc Donald’s is world’s famous fast food restaurant chain consisting of 34000 local restaurants. It is present in 119 countries serving 47 million customers on daily basis. It is globally recognized by the Golden arches as its logo. In 1954, Mc Donald’s founder Raymond Kroc passed by a hamburger stand in San Bernardino, California and then he came up with an idea of forming a countrywide fast food chain.
McDonalds has always been a leader in the fast food industry. Through its dynamic market expansion, new products and special promotional strategies, it has succeeded in making a name for itself in the minds of the target customers. However, McDonald’s earnings has declined in the late 1990’s and 2000s. This is mainly due to a fiercely competitive industry and variety in customer tastes and preferences.
McDonald’s vision statement can be said that it wants to be the world’s best quick service restaurant experience. Being the best for McDonald’s means that it needs to provide the best of the quality of food products, services, and cleanliness and value so that it can make everyone of its customer smile (Schmitt and et.al, 2011). A vision statement of the company is an idea for how business can be eventually perceived and what actions it will be taking for coming 5, 10 or 15 years for i...
Fierce and growing competition – big fast food companies like Burger King and Kentucky Fried Chicken are constantly competing with McDonalds for customers and trying to take the spot as the top fast food chain.