Week 1 Checkpoint: Assessing Financial Statements Paul Swanky SAC/230/Financial Reporting: Peeking Under The Financial Hood 08/30/2013 For the purposes of this checkpoint assignment, I have chosen the McDonald’s Corporation (MAC). Upon reviewing the three (3) relevant financial reports available; Income Statement, Balance Sheet, and Statement of Cash Flow, I have identified three (3) financial strengths and three (3) financial weaknesses in the financial statements of MAC.
The financial strengths of MAC are the continued growth in Operating Income ($8. 361 billion), positive Interest and Investment Income ($28 million), and a 71. 4% increase in Prepaid Expenses ($880. 5 million) over 1 year, all of which demonstrate that Mac’s present and future business strength is steady if not escalating and “rock” solid. (All figures as of 12/31/2012). The financial weaknesses of MAC
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In regards to Debt Compared to Assets and Debt Compared to Equity, assets of $35. 39 billion and total liabilities of $20. 09 billion hold a Total Liabilities/Total Assets of 56. XX. Total equity of $15. 29 billion creates a Total Debt/Equity of 88. 1 X. The aforementioned trends and ratios are above the industry standards. I found no indication that MAC addressed the issue of correcting negative trends on their website. References 1 . McDonald’s. Com/http://www. Abdominally. Com/Mac/investors/ HTML 2. McDonald’s, SEC filings, Form 10-K