McDonald’s Corporation (MCD)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	25,920,000	25,494,000	23,182,600	23,222,900	19,207,800
Total current assets	US$ in thousands	4,599,000	7,986,000	5,424,200	7,148,500	6,243,200
Total current liabilities	US$ in thousands	3,861,000	6,859,000	3,802,100	4,020,000	6,181,200
Working capital turnover		35.12	22.62	14.29	7.42	309.80

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $25,920,000K ÷ ($4,599,000K – $3,861,000K)
= 35.12

The working capital turnover for McDonald's Corporation, as reflected in the data provided, has shown significant fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The ratio indicates the efficiency of the company in utilizing its working capital to generate sales revenue.

Initially, in December 2020, the working capital turnover was exceptionally high at 309.80, suggesting that McDonald's was efficiently using its working capital to generate sales. However, this figure dropped drastically to 7.42 by December 2021, indicating a significant decrease in the utilization of working capital to generate revenue.

Subsequently, there was an improvement in the working capital turnover ratio, reaching 14.29 by December 2022, signaling a more efficient utilization of working capital compared to the previous year. This positive trend continued into the following years, with the ratio further increasing to 22.62 by December 2023 and then to 35.12 by December 2024.

Overall, the working capital turnover ratio for McDonald's Corporation has shown a volatile but generally improving trend over the five-year period, indicating a better utilization of working capital to drive sales revenue. This improvement suggests that the company has enhanced its efficiency in managing its working capital effectively to support its operations and growth.