1. What is the tone of the CEO’s letter to shareholders (first page of text) Why do you think they chose this tone?
2. Using data from p. 11, describe the trend in total revenues from 2009 through 2014.
3. Using data from p.11, describe the trend in Net Income from 2009 through 2014.
4. Using data from p. 29, what is the company’s largest expense item?
5. Using data from p. 29, can you tell what actual items caused the $18.6 million “Other operating (income) expense” for 2014? In other words, can you tell what transactions occurred to generate this?
6. Using data from p. 29, did McDonald’s incur depreciation expense? Can you tell how much?
7. Using data from p. 39 (under the heading “Property and Equipment”), can you refine your answer to question 6? Where do you think the depreciation expense values are embedded on p. 29?
8. Consider the data reported on p. 31. McDonald’s is primarily a cash-receipt business when it sells food. Why do you think the company reports a balance for Accounts and notes receivable? Who do you think owes the company this money?
9. Consider the data reported on p. 31. What do you think McDonald’s Property and equipment numbers would look like if it could report property and equipment at fair value (if it adopted IFRS, for example), instead of at cost?
10. Consider the data reported on p. 31. What is McDonald’s largest component of Current liabilities? Explain how this current obligation occurs.
11. Consider the letter on p. 47. Who wrote it? What does it mean?
12. Looking at p. 29 and 30, does McDonald’s report Comprehensive Income or Net Income?
13. What types of things typically generate “other comprehensive income”?
14. Looking at p. 30, what accounts contributed to changes in other comprehensive income? [Hint: look for the columns that report changes in Accumulated other comprehensive income (loss).]
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