McDonald’s Corporation (MCD)

Quick ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cash	US$ in thousands	1,085,000	4,579,000	2,583,800	4,709,200	3,449,100
Short-term investments	US$ in thousands	—	300	—	300	1,297,000
Receivables	US$ in thousands	2,383,000	2,488,000	2,115,000	1,872,400	2,110,300
Total current liabilities	US$ in thousands	3,861,000	6,859,000	3,802,100	4,020,000	6,181,200
Quick ratio		0.90	1.03	1.24	1.64	1.11

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($1,085,000K + $—K + $2,383,000K) ÷ $3,861,000K
= 0.90

The quick ratio for McDonald’s Corporation has shown variations over the years.

As of December 31, 2020, the quick ratio was 1.11, indicating that the company had $1.11 in liquid assets available to cover each dollar of current liabilities. This suggests a relatively strong liquidity position.

By December 31, 2021, the quick ratio improved to 1.64, signaling an increase in the company's ability to meet short-term obligations using its most liquid assets. This implies improved liquidity management.

However, by December 31, 2022, the quick ratio decreased to 1.24. Although still above 1, this decline may indicate a slight reduction in the company's ability to promptly cover its current liabilities with its liquid assets.

The quick ratio further decreased to 1.03 as of December 31, 2023, approaching the 1:1 threshold. This indicates a potential decrease in liquidity, which could raise concerns about the company's short-term financial health.

As of December 31, 2024, the quick ratio dropped to 0.90, falling below 1. This suggests that McDonald’s Corporation may face challenges in meeting its short-term obligations with its current liquid assets, possibly indicating liquidity strain.

In conclusion, while the quick ratio fluctuated over the years, it is essential for McDonald’s Corporation to monitor its liquidity position closely to ensure it can meet its short-term obligations effectively.