McDonald’s Corporation (MCD)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
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
Current ratio		1.16	1.43	1.78	1.01	0.98

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $7,986,400K ÷ $6,859,000K
= 1.16

The current ratio of McDonald's Corp has fluctuated over the past five years, ranging from 0.98 in 2019 to 1.78 in 2021. The current ratio measures the company's ability to cover its short-term obligations with its current assets. A higher current ratio indicates a stronger liquidity position.

In 2019 and 2020, the current ratio was below 1, indicating that McDonald's short-term liabilities exceeded its current assets during those years. This could suggest potential liquidity challenges in meeting immediate financial obligations.

However, in 2021 and 2022, the current ratio improved significantly to 1.78 and 1.43, respectively, reflecting a healthier liquidity position with current assets more than covering short-term liabilities.

The current ratio decreased in 2023 to 1.16, which is still above 1 but lower compared to the previous two years. This slight decline could be a signal of a relatively weaker liquidity position compared to 2021 and 2022, but McDonald's still has sufficient current assets to meet its short-term obligations.

Overall, McDonald's current ratio has shown fluctuations over the years, but it generally indicates the company has maintained a satisfactory level of liquidity to cover its short-term liabilities. It is vital for the company to monitor its current ratio closely to ensure it can meet its financial obligations effectively.