McDonald’s Corporation (MCD)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 4,579,300 | 2,583,800 | 4,709,200 | 3,449,100 | 898,500 |
| Short-term investments | US$ in thousands | — | — | 300 | 1,297,000 | 14,000 |
| Receivables | US$ in thousands | 2,488,000 | 2,115,000 | 1,872,400 | 2,110,300 | 2,224,200 |
| Total current liabilities | US$ in thousands | 6,859,000 | 3,802,100 | 4,020,000 | 6,181,200 | 3,621,000 |
| Quick ratio | 1.03 | 1.24 | 1.64 | 1.11 | 0.87 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($4,579,300K
+ $—K
+ $2,488,000K)
÷ $6,859,000K
= 1.03
The quick ratio of McDonald's Corp has shown some fluctuations over the past five years. In 2023, the quick ratio stood at 1.16, which indicates that the company had $1.16 of liquid assets available to cover each $1 of current liabilities. This ratio has declined from 1.41 in 2022 and 1.76 in 2021, suggesting a potential decrease in the company's ability to meet its short-term obligations with its most liquid assets.
The quick ratio of 1.16 in 2023 is still above 1, indicating that McDonald's Corp has an adequate level of liquid assets to cover its current liabilities. However, compared to the previous years, the ratio has decreased, which may raise concerns about the company's short-term liquidity position.
It is worth noting that in 2020 and 2019, the quick ratio was 1.00 and 0.97, respectively, which indicates that McDonald's Corp had just enough liquid assets to cover its short-term obligations during those years.
Overall, while the current quick ratio of McDonald's Corp suggests a relatively strong liquidity position, the downward trend in recent years may signal a need for the company to monitor its liquidity management closely to ensure its ability to meet short-term financial obligations efficiently.
Peer comparison
Dec 31, 2023