McDonald’s Corporation (MCD)

Return on total capital

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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 11,849,000 11,807,200 11,847,400 12,066,300 11,883,000 11,669,600 11,247,800 9,800,600 9,032,400 8,774,000 8,916,700 9,889,500 10,313,700 10,049,200 9,591,300 7,886,600 7,358,800 7,529,700 7,435,300 8,759,500
Long-term debt US$ in thousands 38,424,000 38,990,000 38,524,000 36,764,000 37,153,000 37,274,600 35,710,100 36,603,700 35,903,500 34,866,200 34,576,500 33,988,800 35,622,700 34,628,000 34,922,600 34,823,200 35,196,800 35,143,400 34,675,600 38,046,600
Total stockholders’ equity US$ in thousands -3,797,000 -5,177,000 -4,824,000 -4,833,000 -4,707,000 -4,855,000 -4,999,000 -5,776,000 -6,003,000 -6,566,200 -6,369,800 -5,990,800 -4,601,000 -5,675,000 -5,808,000 -7,235,500 -7,824,900 -8,472,100 -9,463,100 -9,293,400
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%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $11,849,000K ÷ ($38,424,000K + $-3,797,000K)
= 34.22%

The Return on Total Capital of McDonald’s Corporation has shown fluctuations over the past few years. The ratio started at 30.46% as of March 31, 2020, and gradually decreased to 26.88% by December 31, 2020. However, there was an uptick in performance in the following quarters, with a noticeable increase to 34.71% by September 30, 2021.

Subsequently, the Return on Total Capital continued to improve, reaching its peak at 37.79% as of March 31, 2024. However, in the following quarters, there was a slight decline in the ratio, with the figure standing at 34.22% by December 31, 2024.

Overall, the trend indicates that McDonald’s Corporation has been effectively utilizing its capital to generate returns, although there have been some fluctuations in performance during the period under review. It is essential for stakeholders to monitor these ratios consistently to assess the company's financial health and efficiency in deploying its total capital.