McDonald’s Corporation (MCD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 80.03% | 81.81% | 81.61% | 81.71% | 81.97% | 82.04% | 81.85% | 81.39% | 81.18% | 80.94% | 81.24% | 81.58% | 81.72% | 81.17% | 81.22% | 79.58% | 79.27% | 76.65% | 76.11% | 77.95% |
| Operating profit margin | 45.19% | 44.90% | 45.29% | 45.99% | 45.68% | 45.68% | 45.39% | 40.96% | 40.42% | 39.48% | 39.87% | 43.71% | 44.59% | 44.84% | 44.34% | 40.33% | 38.13% | 38.84% | 38.06% | 41.33% |
| Pretax margin | 39.90% | 39.79% | 40.38% | 41.39% | 41.27% | 41.36% | 41.16% | 36.52% | 33.76% | 32.64% | 32.84% | 36.68% | 39.31% | 39.29% | 38.52% | 33.89% | 31.97% | 32.93% | 32.45% | 36.38% |
| Net profit margin | 31.72% | 31.79% | 32.25% | 33.36% | 33.22% | 33.31% | 33.05% | 29.36% | 26.65% | 25.41% | 25.77% | 29.93% | 32.49% | 32.33% | 31.72% | 26.31% | 24.63% | 25.60% | 24.68% | 27.67% |
McDonald's Corporation has shown a consistent improvement in its profitability ratios over the years. The gross profit margin has ranged between 76.11% to 82.04% from March 31, 2020, to December 31, 2024, indicating strong control over production and operating costs.
The operating profit margin improved significantly from 38.06% in June 2020 to around 45% by December 2024. This suggests that the company has been able to efficiently manage its operating expenses and increase profitability from its core business activities.
The pretax margin also displayed a positive trend, increasing from 32.45% in June 2020 to 45.19% by December 2024. This indicates that McDonald's effectively managed its taxes and continued to improve its earnings before taxes over the years.
Furthermore, the net profit margin shows a consistent increase from 24.68% in June 2020 to 31.72% by June 2021 and further to 32.49% by December 2021. This demonstrates the company's ability to generate higher profits after accounting for all expenses, including taxes and interest.
Overall, McDonald's has shown strong profitability performance, with improvements in all key margin ratios over the years, reflecting efficient cost management and solid financial performance.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.22% | 20.73% | 21.68% | 22.14% | 20.74% | 21.94% | 21.77% | 18.44% | 18.58% | 18.94% | 19.10% | 20.42% | 19.23% | 19.16% | 18.58% | 15.48% | 13.92% | 14.74% | 14.73% | 17.14% |
| Return on assets (ROA) | 14.90% | 14.68% | 15.44% | 16.06% | 15.08% | 16.00% | 15.85% | 13.22% | 12.25% | 12.19% | 12.35% | 13.98% | 14.01% | 13.81% | 13.29% | 10.10% | 8.99% | 9.72% | 9.55% | 11.48% |
| Return on total capital | 34.22% | 34.92% | 35.16% | 37.79% | 36.62% | 36.00% | 36.62% | 31.79% | 30.21% | 31.00% | 31.61% | 35.32% | 33.25% | 34.71% | 32.94% | 28.59% | 26.88% | 28.23% | 29.49% | 30.46% |
| Return on equity (ROE) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Based on the provided data for McDonald’s Corporation, let's analyze the profitability ratios:
1. Operating Return on Assets (Operating ROA):
- McDonald’s operating return on assets ranged from 13.92% to 22.14% over the past five years, showing fluctuations but generally improving. The highest Operating ROA was observed in March 31, 2024, at 22.14%. This ratio indicates that the company is generating operating profit efficiently from its assets.
2. Return on Assets (ROA):
- The return on assets for McDonald’s varied between 8.99% and 16.06% during the same period. The ROA increased gradually, with the highest value recorded as of March 31, 2024, at 16.06%. This ratio reflects the company's ability to generate profits relative to its total assets.
3. Return on Total Capital:
- McDonald’s return on total capital ranged from 26.88% to 37.79% from March 31, 2020, to December 31, 2024. The trend shows an overall improvement, reaching the highest value on March 31, 2024, at 37.79%. This metric evaluates the company's profitability in relation to its total capital employed.
4. Return on Equity (ROE):
- Unfortunately, data for return on equity for McDonald's is unavailable for the specified periods. ROE is a crucial metric to assess how efficiently a company is utilizing shareholders' equity to generate profit.
In summary, McDonald’s Corporation has shown positive trends in its profitability ratios such as Operating ROA, ROA, and Return on Total Capital over the analyzed period. These ratios indicate the company's ability to generate profits from its assets and capital, reflecting positively on its operational efficiency and financial performance.
See also:
McDonald’s Corporation Profitability Ratios (Quarterly Data)