**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)

Gross profit Ratio - It is a ratio that shows the relationship between the gross profit and the Sales of the company. Operating profit ratio - It is a ratio that shows the operating performance of the company. Net Profit Ratio - It is a ratio that shows the relationship between the net profit and the net sales of the company. Comments; Since the amount of total assets is not given in the question, the return on total assets is not calculated.Ratio 2019 2018 Increase/ Decrease/ Same Gross profit Ratio = Gross profit x 100 Sales $15,391.8 x 100$21,076.5 = 73% $14,933.5 x 100$21,025.2 = 71% Increase operating profit Ratio= Operating Profit x 100Net Sales $9,069.8 x 100$21,076.5= 43% $8,822.6 x 100$21,025.2 = 41.9% Increase Net Profit Ratio = Net Profit x 100Net Sales $6,025.4 x 100$21,076.5 = 28.6% $5,924.3 x 100$21,025.2= 28.2% increase Gross Profit = Sales - Direct Expenses 2019 = $21,076.5 - $2,980.3 - $2,704.4 = $15,391.8 2018 = $21,025.2 - $3,153.8 - $2,937.9 = $14,933.5

Business

Accounting

In millions, except per share data Years ended December 31, 2019 2018 2017 REVENUES Sales by Company-operated restaurants Revenues from franchised restaurants $ 9,420.8 $ 10,012.7 $ 12,718.9 11,655.7 11,012.5 10,101.5 Total revenưes ...... .. 21,076.5 21,025.2 22,820.4 ..... ............. ... .................. OPERATING COSTS'AND EXPENSES Company-operated restaurant expenses Food & paper 2,980.3 3,153.8 4,033.5 Payroll & employee benefits Occupancy & other operating expenses ranchised restaurants-occupancy expenses 2,704.4 2,937.9 3,528.5 2,075.9 2,174.2 2,847.6 2,200.6 1,973.3 1,790.0 elling, general & administrative expenses ther operating (income) expense, net Total operating costs and expenses perating income erest expense-net of capitalized interest of $7.4, $5.6 and $5.3 2,229.4 2,200.2 2,231.3 (183.9) (236.8) (1,163.2) 12,006.7 12,202.6 13,267.7 8,822.6 981.2 9,069.8 9,552.7 1,121.9 921.3 ד

In millions, except per share data Years ended December 31, 2019 2018 2017 REVENUES Sales by Company-operated restaurants Revenues from franchised restaurants $ 9,420.8 $ 10,012.7 $ 12,718.9 11,655.7 11,012.5 10,101.5 Total revenưes ...... .. 21,076.5 21,025.2 22,820.4 ..... ............. ... .................. OPERATING COSTS'AND EXPENSES Company-operated restaurant expenses Food & paper 2,980.3 3,153.8 4,033.5 Payroll & employee benefits Occupancy & other operating expenses ranchised restaurants-occupancy expenses 2,704.4 2,937.9 3,528.5 2,075.9 2,174.2 2,847.6 2,200.6 1,973.3 1,790.0 elling, general & administrative expenses ther operating (income) expense, net Total operating costs and expenses perating income erest expense-net of capitalized interest of $7.4, $5.6 and $5.3 2,229.4 2,200.2 2,231.3 (183.9) (236.8) (1,163.2) 12,006.7 12,202.6 13,267.7 8,822.6 981.2 9,069.8 9,552.7 1,121.9 921.3 ד

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A 2 A === Aäl Ccl AaBbCc AаBb( AaВЬС АаВЬСс Heading 1 Heading 2 Heading 3 Heading 4 Heading 7 Paragraph Styles Section V: Statement of Income-Question 5 Identify McDonald's EPS-basic amounts. You can find this value at the bottom of the statement of income. Basic EPS Current year, 2019? Click here to enter text. Preceding year 1? Click here to enter text. Preceding year 2? Click here to enter text. Does it appear that McDonald's EPS-basic improved over the prior years? Click here to enter text. McDonald's Consolidated Statement of Cash Flows (SCF) Alternate company: Statement of Cash Flows found in SEC Form 10-K. Section V: SCF Question 1 Review the heading of McDonald's SCF. Does its SCF include two or three years of comparative information? Click here to enter text. Yrs.
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