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The Worlds Largest Fast Food Chain - Essay Example

Summary

The paper "The World’s Largest Fast Food Chain" states that the company operates in almost all continents holding major stock shares. The table below indicates the diverse shares that the corporations hold in the rest of the world. The company generates more than $100 billion a year…

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Subject: Finance & Accounting
Type: Essay
Level: Ph.D.
Pages: 3 (750 words)
Downloads: 2
Author: gottliebclaudie

Extract of sample "The Worlds Largest Fast Food Chain"

McDonald’s corporation is one of the world’s largest fast food chain stores. It has over 30,000 restaurants around the globe.

Chart 1: Showing Shares around the Globe

According to the table below the company is ranked among the best-performing food companies around the group based on corporate responsibility, environmental sustainability, and productivity.

Table 1: Fast Food Companies Ranking

Company

Country

Assets

(in billions)

Revenues

(in billions)

Profits

(in billions)

McDonald's

$293

$376

$26

KFC

USA

$209

$236

$27

SUBWAY

USA

$331

$434

$41

Pizza Hut

China

$328

$139

$39

Starbucks

$345

$470

$31

McDonald’s can reach out to all our clients/customers all the time. The bulk of our company’s communication focuses on products and sales. The company often varies and communicates frequently with our customers based on the type of calls and messages they write. Instead of using promotions and advertisements, they opted to use newsletters and soft-sell messages sent directly to clients. This was McDonald’s business strategy to increase its sales of food and franchise around the globe. This was during the battle for supremacy and competition for survival. Because of this, McDonald’s stock price increased during this period as indicated in the chart below.

Chart 1: McDonald's Stock Price Comparison

Market Profile

52-Week Low

78.17

52-Week High

107.40

Previous Close

123.95

Beta

1.07

EPS

11.23

P/E

6.89

Market Cap

210.20 Billion

Average Volume

5,291,430

The success of McDonald's was largely because of the supportive and well-guided staff as well as commitment to producing better results for the company in the right manner such as executing and operating and implementing innovative technologies and utilizing opportunities available (Grez et al., 9). The table below indicates the strong platform in the financial market that the company has ranking them as the best in the US and the World.

As of March 31st 20,13

Return on Assets

6.89%

Return on Equity

13.57%

EPS

15.23

Plow back Ratio (b)

83%

P/E

6.89

Net Income

13.89 Billion

Total Equity

1.29 Billion

Table 2: Table indicating Financial Ratios

McDonald's is considered a member of Franchise major companies in the world. Among them are Starbucks and Pizza Hut as well as KFC. The ideal reasons why they are called Franchise majors are that they control more than 26% of the world's fast food franchise. The chart below indicates the percentage of Franchise Majors (Yuece 12).

The two biggest competitors are Starbucks and Pizza Hut. As indicated in the table below, McDonald's has not been left behind the line of the key competitors. The company is always doing well as compared to its industry average in contrast to other essential ratios. The company has a high market capitalization than its industry average.

Table 3: Market Capitalization

(McDonald)

Starbucks

Pizza Hut

Industry

Market Cap:

230.60B

133.18B

397.86B

96.92B

Employees:

62,000

85,700

76,900

85.70K

Quarterly Rev Growth:

-0.09

-0.01

-0.13

0.30

Revenue:

217.73B

374.81B

413.86B

179.46B

Gross Margin:

0.30

0.11

0.30

0.24

EBITDA:

46.20B

28.68B

71.86B

30.72B

Operating Margin:

0.15

0.04

0.13

0.10

Net Income:

25.89B

22.68B

44.93B

N/A

EPS:

13.23

7.10

9.83

3.78

P/E:

8.99

5.87

9.10

10.20

PEG (5 yrs. expected):

11.85

1.68

5.89

1.26

P/S:

1.05

0.35

0.96

0.53

Risk and Return Analysis

Table 4: Risk and Return Analysis

Table 4 - Risk & Return Analysis

Weeks

Adj Close (S&P 500)

HPR (S&P 500)

β (S&P 500)

Adj Close (McDonald)

HPR (McDonald)

β (McDonald)

Return to Risk Ratio (S&P 500)

Return to Risk Ratio (McDonald)

Week 1

1667.47

123.42

1.17

Week 2

1649.60

0.01071

125.45

0.016448

1.17

0.010716834

0.014058035

Week 3

1630.74

0.01143

122.75

-0.021523

1.17

0.011433075

0.018395315

Week 4

1643.38

0.00775

121.7

-0.008554

1.17

0.007751082

0.007311087

Week 5

1626.73

0.01013

120.8

-0.007395

1.17

0.010131558

0.006320713

Week 6

1667.72

0.00914

121.4

0.008417

1.17

0.000181478

0.007531763

Week7

1621.65

0.00768

120.8

0.007456

1.17

0.010004581

Week8

1633.41

0.01215

122.7

0.010567

1.17

0.012222716

Week 9

1668.22

0.00811

121.3

0.008765

1.17

0.000561043

0.019404581

Week 10

1691.77

0.0102.4

120.5

0.010345

1.17

0.012634072

0.065616834

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