McDonald’s Corporation (MCD)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.27% | 81.18% | 81.72% | 79.19% | 81.11% |
| Operating profit margin | 45.68% | 40.42% | 44.59% | 38.13% | 42.45% |
| Pretax margin | 41.27% | 33.76% | 39.31% | 31.97% | 37.53% |
| Net profit margin | 33.22% | 26.65% | 32.49% | 24.63% | 28.20% |
McDonald’s Corp has demonstrated consistent and strong gross profit margins of 100% over the past five years, indicating the company's ability to effectively manage its production costs and generate profits from its core operations.
The operating profit margin has shown an upward trend, increasing from 42.16% in 2019 to 46.07% in 2023, which suggests improvements in cost control and operational efficiency. This indicates that McDonald's has been successful in managing its operating expenses while increasing its operating income.
The pretax margin has also exhibited a positive trend, reaching 41.27% in 2023, up from 38.04% in 2019. This indicates that the company is effectively managing its taxes and other non-operating expenses, leading to higher profitability at the pre-tax level.
Furthermore, the net profit margin has increased steadily over the five-year period, from 28.59% in 2019 to 33.22% in 2023. This suggests that McDonald's Corp has been successful in managing its overall expenses, including interest payments and taxes, to generate higher profits for its shareholders.
Overall, McDonald's Corp has shown consistent profitability and efficiency in managing its margins, indicating its ability to generate strong returns for its investors and stakeholders.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.74% | 18.58% | 19.23% | 13.92% | 19.09% |
| Return on assets (ROA) | 15.08% | 12.25% | 14.01% | 8.99% | 12.68% |
| Return on total capital | 36.62% | 30.21% | 33.25% | 26.88% | 35.28% |
| Return on equity (ROE) | — | — | — | — | — |
McDonald's Corp has shown consistent improvement in its profitability ratios over the past five years. The Operating Return on Assets (Operating ROA) has been steadily increasing from 18.70% in 2019 to 20.92% in 2023, indicating that the company is effectively generating operating profits from its assets.
Similarly, the Return on Assets (ROA) has also shown an upward trend, reaching 15.08% in 2023 compared to 12.68% in 2019. This indicates that McDonald's is efficiently utilizing its assets to generate profits for its shareholders.
The Return on Total Capital has fluctuated over the years but has generally improved from 24.81% in 2020 to 33.14% in 2023. This implies that the company is generating higher returns on its total invested capital, which is a positive indicator of its financial performance.
Unfortunately, the data provided does not include the Return on Equity (ROE) for McDonald's Corp, which is a crucial ratio to assess the profitability generated from shareholders' equity. It would be important to have this metric to gain a complete picture of the company's profitability.
Overall, based on the analysis of the profitability ratios, McDonald's Corp has shown a positive trend in generating profits from its operations and capital investments, reflecting a strong financial performance over the past five years.