FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**Section V: Statement of Income — Question 4**

**Instructions:**
Compute the following ratios for 2019. Indicate in the right-hand column if the value increased or decreased between the current year and the prior year. In the next section, you evaluate the findings.

Alternate company: compute for both years.

| **Ratio Name**              | **McDonald's Corporation** | **Increasing, Decreasing or Same?** |
|-----------------------------|----------------------------|------------------------------------|
|                             | **Current Year**              | **Prior Year**                     |                                    |
| **Gross profit margin***    | Click here to enter text.  | Click here to enter text.         | Click here to enter text.         |
| **Operating profit margin** | Click here to enter text.  | Click here to enter text.         | Click here to enter text.         |
| **Net profit margin**       | Click here to enter text.  | Click here to enter text.         | Click here to enter text.         |
| **Return on assets**        | Click here to enter text.  | Click here to enter text.         | Click here to enter text.         |

**Note:**
*Gross profit is an important measure for tangible goods and service industries. When a company is in the real estate and tangible goods and/or service industries, the gross profit must be calculated with specific sales and cost of goods measures drawn from the statement of income.
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Transcribed Image Text:**Section V: Statement of Income — Question 4** **Instructions:** Compute the following ratios for 2019. Indicate in the right-hand column if the value increased or decreased between the current year and the prior year. In the next section, you evaluate the findings. Alternate company: compute for both years. | **Ratio Name** | **McDonald's Corporation** | **Increasing, Decreasing or Same?** | |-----------------------------|----------------------------|------------------------------------| | | **Current Year** | **Prior Year** | | | **Gross profit margin*** | Click here to enter text. | Click here to enter text. | Click here to enter text. | | **Operating profit margin** | Click here to enter text. | Click here to enter text. | Click here to enter text. | | **Net profit margin** | Click here to enter text. | Click here to enter text. | Click here to enter text. | | **Return on assets** | Click here to enter text. | Click here to enter text. | Click here to enter text. | **Note:** *Gross profit is an important measure for tangible goods and service industries. When a company is in the real estate and tangible goods and/or service industries, the gross profit must be calculated with specific sales and cost of goods measures drawn from the statement of income.
**Consolidated Statement of Income**

*In millions, except per share data*

**Years ended December 31,** 
- **2019**
- **2018**
- **2017**

---

**REVENUES**

- **Sales by Company-operated restaurants:**
  - 2019: $9,420.8
  - 2018: $10,012.7
  - 2017: $12,718.9

- **Revenues from franchised restaurants:**
  - 2019: $11,655.7
  - 2018: $11,012.5
  - 2017: $10,101.5

- **Total revenues:**
  - 2019: $21,076.5
  - 2018: $21,025.2
  - 2017: $22,820.4

---

**OPERATING COSTS AND EXPENSES**

- **Company-operated restaurant expenses:**
  - **Food & paper:**
    - 2019: $2,980.3
    - 2018: $3,153.8
    - 2017: $4,033.5

  - **Payroll & employee benefits:**
    - 2019: $2,704.4
    - 2018: $2,937.9
    - 2017: $3,528.5

  - **Occupancy & other operating expenses:**
    - 2019: $2,075.9
    - 2018: $2,174.2
    - 2017: $2,847.6

- **Franchised restaurants-occupancy expenses:**
  - 2019: $2,200.6
  - 2018: $1,973.3
  - 2017: $1,790.0

- **Selling, general & administrative expenses:**
  - 2019: $2,229.4
  - 2018: $2,200.2
  - 2017: $2,231.3

- **Other operating (income) expense, net:**
  - 2019: $(183.9)
  - 2018: $(236.8)
  - 2017: $(1,163.2)
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Transcribed Image Text:**Consolidated Statement of Income** *In millions, except per share data* **Years ended December 31,** - **2019** - **2018** - **2017** --- **REVENUES** - **Sales by Company-operated restaurants:** - 2019: $9,420.8 - 2018: $10,012.7 - 2017: $12,718.9 - **Revenues from franchised restaurants:** - 2019: $11,655.7 - 2018: $11,012.5 - 2017: $10,101.5 - **Total revenues:** - 2019: $21,076.5 - 2018: $21,025.2 - 2017: $22,820.4 --- **OPERATING COSTS AND EXPENSES** - **Company-operated restaurant expenses:** - **Food & paper:** - 2019: $2,980.3 - 2018: $3,153.8 - 2017: $4,033.5 - **Payroll & employee benefits:** - 2019: $2,704.4 - 2018: $2,937.9 - 2017: $3,528.5 - **Occupancy & other operating expenses:** - 2019: $2,075.9 - 2018: $2,174.2 - 2017: $2,847.6 - **Franchised restaurants-occupancy expenses:** - 2019: $2,200.6 - 2018: $1,973.3 - 2017: $1,790.0 - **Selling, general & administrative expenses:** - 2019: $2,229.4 - 2018: $2,200.2 - 2017: $2,231.3 - **Other operating (income) expense, net:** - 2019: $(183.9) - 2018: $(236.8) - 2017: $(1,163.2)
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