McDonald’s Corporation (MCD)

Return on total capital

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	11,850,000	11,883,000	9,032,400	10,313,700	7,358,800
Long-term debt	US$ in thousands	38,424,000	37,153,000	35,903,500	35,622,700	35,196,800
Total stockholders’ equity	US$ in thousands	-3,797,000	-4,707,000	-6,003,000	-4,601,000	-7,824,900
Return on total capital		34.22%	36.62%	30.21%	33.25%	26.88%

December 31, 2024 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $11,850,000K ÷ ($38,424,000K + $-3,797,000K)
= 34.22%

Return on total capital is a key financial metric that indicates a company's efficiency in generating profits from its total invested capital. Analyzing the data provided for McDonald’s Corporation from 2020 to 2024, we observe a consistent upward trend in return on total capital over the years.

In 2020, McDonald’s achieved a return on total capital of 26.88%, indicating that for every dollar of total capital invested, the company generated approximately $0.27 in profit. This value increased significantly to 33.25% in 2021, reflecting improved profitability and efficient utilization of capital.

By the end of 2022, McDonald’s return on total capital stood at 30.21%, indicating sustained profitability and effective management of invested capital. The metric experienced a notable rise to 36.62% in 2023, showcasing the company’s ability to optimize its capital structure and generate higher returns for shareholders.

In the most recent year, 2024, McDonald’s maintained a strong return on total capital of 34.22%, demonstrating continued financial health and effective allocation of resources to generate profits. Overall, the increasing trend in return on total capital signifies McDonald’s Corporation's consistent focus on maximizing returns for its investors and shareholders through efficient capital management strategies.