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Unformatted text preview: Return on Assets = 4,946.3/31,975.2 = 0.154 Because McDonald’s is a corporation of high investments, then this is reflected with a low ROA. Return on Equity = Net Income/Shareholder Equity Return of Equity = 4,946.3/14,634.2 = 0.337 McDonald’s Co. has a desirable ROE, which would attract investors, since it is over 20%. In this case is it over 33%. Common Share Dividend Yield = Dividend per Share/Share Price Dividend Yield = 2.26/84.99 = 0.026 This number does not inspire great increase in dividends for the future. Financial Leverage: Gross Profit Margin = Gross Income/Sales Gross Profit Margin = 0.78 Prior to this year, the company experienced a drop, meaning that they received less profit per every dollar sold. Net Profit Margin = Net Income/Sales Net Profit Margin = 0.21 These values have remained stable during the last 3 years, leaving the company with almost the same amount of profit....
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This note was uploaded on 08/09/2011 for the course ACCOUNTING --- taught by Professor --- during the Spring '11 term at Universidad Iberoamericana.
- Spring '11