McDonald’s Corporation (MCD)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	87.03	94.38	83.79	84.60	83.90	102.18	102.20	88.27	76.37	84.66	85.41	88.43	77.93	86.50	91.01	97.57	74.66	138.85	130.95	139.78
Receivables turnover	10.25	11.13	11.03	11.28	10.96	12.31	12.85	14.20	12.40	12.32	12.02	11.32	9.10	8.05	6.78	12.37	9.57	10.52	10.20	10.49
Payables turnover	4.17	5.21	5.44	5.37	4.45	5.58	5.98	6.09	4.22	5.49	5.59	5.98	5.37	5.55	7.20	5.68	3.79	6.96	7.26	6.92
Working capital turnover	22.61	8.79	19.02	10.77	14.29	10.32	16.39	56.34	7.42	13.25	12.31	22.09	309.80	42.21	—	5.88	—	—	31.04	13.19

Activity ratios measure how efficiently a company manages its assets and liabilities to generate sales. Looking at the activity ratios of McDonald's Corp, we can see some interesting trends:

1. Inventory Turnover:
- The inventory turnover ratio fluctuates significantly over the quarters, ranging from negative values to a high of 26.48.
- A consistently low or negative inventory turnover, as seen in Q1 and Q4 of 2023, can indicate inefficient inventory management or overstocking.
- The high inventory turnover in Q1 and Q2 of 2022 suggests that McDonald's effectively managed its inventory levels during those periods.

2. Receivables Turnover:
- The receivables turnover remains relatively stable around the range of 10-14 over the quarters.
- A consistent receivables turnover ratio indicates that McDonald's efficiently collects payments from its customers, which is essential for maintaining healthy cash flow.

3. Payables Turnover:
- The payables turnover ratio also fluctuates, with some quarters showing negative values.
- Negative payables turnover ratios may suggest issues with managing supplier payments or potentially taking advantage of longer payment terms.
- The fluctuation in this ratio could also be influenced by changes in the company's payment policies or supplier relationships.

4. Working Capital Turnover:
- The working capital turnover ratio shows variation across quarters, with a peak in Q1 of 2022.
- A higher working capital turnover ratio indicates that McDonald's is effectively utilizing its working capital to support sales activity. It reflects how efficiently the company is using its current assets to generate revenue.

In conclusion, analyzing McDonald's Corp's activity ratios reveals fluctuations in inventory turnover, stable receivables management, varying payables turnover, and changes in working capital efficiency. These ratios provide insights into the company's operational efficiency and management of assets and liabilities over time.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	4.19	3.87	4.36	4.31	4.35	3.57	3.57	4.14	4.78	4.31	4.27	4.13	4.68	4.22	4.01	3.74	4.89	2.63	2.79	2.61
Days of sales outstanding (DSO)	days	35.62	32.79	33.09	32.35	33.30	29.65	28.41	25.71	29.43	29.63	30.35	32.26	40.10	45.37	53.87	29.50	38.14	34.69	35.78	34.78
Number of days of payables	days	87.61	70.06	67.05	68.01	82.01	65.41	60.99	59.91	86.55	66.49	65.34	61.05	67.95	65.78	50.69	64.29	96.24	52.42	50.25	52.71

Days of Inventory on Hand (DOH) for McDonald's Corp has been fluctuating over the quarters, with significant variations observed from quarter to quarter. In Q3 2023, the company had 27.11 days of inventory on hand, indicating efficient management of inventory compared to Q2 2023 when it had 67.01 days, suggesting an excess of inventory during that period.

Days of Sales Outstanding (DSO) have also shown some variability but generally remained within a reasonable range. The company took an average of 32-35 days to collect payments from customers over the past quarters, which is a standard timeframe for the industry.

The Number of Days of Payables reflects how long McDonald's takes to pay its suppliers. The data shows a significant increase in Q3 2023 to 491.22 days compared to Q2 2022, where it only took 199.72 days to pay, indicating a less efficient management of payables in the recent quarter.

Overall, McDonald's Corp has shown mixed results in its activity ratios, with improvements in inventory management but a decrease in efficiency regarding payables. Further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's performance in these areas.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	1.02	1.05	1.00	0.98	0.98	1.02	1.01	0.97	0.94	0.92	0.88	0.80	0.77	0.79	0.81	0.89	0.88	0.90	0.89	0.90
Total asset turnover	0.45	0.48	0.48	0.45	0.46	0.48	0.48	0.47	0.43	0.43	0.42	0.38	0.36	0.38	0.39	0.41	0.45	0.46	0.45	0.45

The fixed asset turnover ratio for McDonald's Corp has been relatively stable over the past eight quarters, ranging between 0.97 and 1.05. This indicates that the company generates approximately $1 of revenue for every dollar invested in fixed assets, such as property, plant, and equipment.

On the other hand, the total asset turnover ratio has also shown consistency, hovering around 0.45 to 0.48. This implies that McDonald's Corp generates approximately $0.45 to $0.48 in revenue for each dollar of total assets employed in its operations.

Overall, the company's ability to efficiently utilize both fixed and total assets to generate sales revenue appears to be steady, with no significant fluctuations observed in the long-term activity ratios over the analyzed quarters.