McDonald’s Corporation (MCD)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	25,493,700	23,182,600	23,222,900	19,207,800	21,364,400
Total current assets	US$ in thousands	7,986,400	5,424,200	7,148,500	6,243,200	3,557,900
Total current liabilities	US$ in thousands	6,859,000	3,802,100	4,020,000	6,181,200	3,621,000
Working capital turnover		22.61	14.29	7.42	309.80	—

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $25,493,700K ÷ ($7,986,400K – $6,859,000K)
= 22.61

The working capital turnover ratio for McDonald's Corp has exhibited significant fluctuations over the past five years. In 2023, the working capital turnover ratio was 22.61, indicating that the company generated sales revenue 22.61 times for each dollar of working capital invested. This represents a substantial improvement from the previous year, where the ratio was 14.29.

In 2022, the working capital turnover ratio was 14.29, showing a moderate level of efficiency in utilizing working capital to generate sales. The ratio further declined in 2021 to 7.42, indicating a decrease in the company's ability to efficiently convert working capital into sales revenue.

The significant spike in the working capital turnover ratio in 2020 to 309.80 is likely an outlier or a result of unique circumstances that distorted the ratio, making it less meaningful for comparative analysis. Unfortunately, data for the working capital ratio is not available for 2019, limiting the ability to assess trends over a longer period.

Overall, the working capital turnover ratio for McDonald's Corp has shown variability, with a notable improvement in 2023 compared to the previous year, suggesting a positive trend in the company's ability to generate sales relative to its investment in working capital.