McDonald’s Corporation (MCD)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.70 | 0.69 | 0.72 | 0.69 | 0.66 | 0.72 | 0.71 | 0.70 | 0.71 | 0.72 | 0.70 | 0.67 | 0.66 | 0.66 | 0.67 | 0.68 | 0.67 | 0.69 | 0.69 | 0.75 |
| Debt-to-capital ratio | 1.11 | 1.15 | 1.14 | 1.15 | 1.15 | 1.15 | 1.16 | 1.19 | 1.20 | 1.23 | 1.23 | 1.21 | 1.15 | 1.20 | 1.20 | 1.26 | 1.29 | 1.32 | 1.38 | 1.32 |
| Debt-to-equity ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The Debt-to-assets ratio for McDonald’s Corporation has shown a declining trend over the past few years, decreasing from 0.75 as of March 31, 2020, to 0.70 as of June 30, 2024. This indicates that the company's total debt relative to its total assets has been decreasing.
The Debt-to-capital ratio has also been decreasing from 1.32 as of March 31, 2020, to 1.11 as of December 31, 2024. This suggests that the proportion of debt in the company's capital structure has been decreasing, which can be seen as a positive sign.
The Debt-to-equity ratio and Financial leverage ratio are not available for analysis as the data is not provided for the specified periods.
Overall, based on the solvency ratios analyzed, McDonald’s Corporation has shown improvement in its debt management and capital structure efficiency over the years, with decreasing debt ratios indicating a stronger financial position in terms of solvency and leverage.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 7.87 | 7.94 | 8.19 | 8.60 | 8.73 | 8.81 | 8.73 | 7.84 | 7.48 | 7.44 | 7.64 | 8.43 | 8.70 | 8.38 | 7.89 | 6.37 | 6.04 | 6.32 | 6.39 | 7.77 |
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio signifies a company's stronger ability to meet interest obligations.
Based on the data provided on McDonald’s Corporation's interest coverage ratio over a series of quarters, the trend shows fluctuation but generally indicates a sufficient ability to cover interest expenses. The interest coverage ratio has ranged from a low of 6.04 in December 31, 2020, to a high of 8.81 in September 30, 2023.
The interest coverage ratio for McDonald’s consistently remained above the industry benchmark of 2 to 3 times, suggesting that the company has been comfortably able to cover its interest payments with its operating income.
Overall, the trend in McDonald’s interest coverage ratio demonstrates the company's stable financial health and ability to manage its debt obligations effectively. Investors and analysts may view this trend positively, as it indicates a lower risk of default due to inadequate coverage of interest payments.