RLGA02H3 Lecture : Lecture 3
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Financial Ratios | Competitive Comparison | |||||
Liquidity (Balance Sheet) | Calculations | Starbucks | Yum! | |||
2010 | 2009 | 2008 | 2010 | 2010 | ||
Current Ratio | 1.49 | 1.14 | 1.39 | 1.55 | 0.94 | |
Quick or Acid Test | 1.22 | 0.96 | 1.18 | 0.98 | 0.69 | |
Inventory to net working capital | 0.08 | 0.25 | 0.11 | 0.56 | -1.4 | |
Activity (Balance Sheet) | ||||||
2010 | 2009 | 2008 | ||||
Inventory turnover | 219.06 | 214.17 | 210.96 | 8.21 | 42.96 | |
Fixed asset turnover | 1.09 | 1.06 | 1.16 | 4.43 | 2.96 | |
Total Asset Turnover | 0.75 | 0.75 | 0.83 | 1.68 | 1.36 | |
Leverage (Balance Sheet) | ||||||
2010 | 2009 | 2008 | ||||
Debt to Assets Ratio | 0.36 | 0.35 | 0.36 | 0.08 | 0.35 | |
Long-term debt to equity ratio | 0.79 | 0.75 | 0.76 | 0.15 | 2.28 | |
Debt to equity | 1.18 | 1.15 | 1.13 | 0.74 | 3.98 | |
Times-interest earned ratio | 16.53 | 14.71 | 12.78 | 44.94 | 9.17 | |
Profitability (Income Statement) | ||||||
2010 | 2009 | 2008 | ||||
Gross profit Margin | 0.40 | 0.39 | 0.37 | 0.58 | 0.16 | |
Operating profit margin | 0.31 | 0.31 | 0.28 | 0.13 | 0.15 | |
Net Profit margin | 0.21 | 0.20 | 0.18 | 0.08 | 0.1 | |
Return on total assets | 0.15 | 0.15 | 0.15 | 0.15 | 0.14 | |
Return on equity | 0.34 | 0.32 | 0.32 | 0.26 | 0.73 | |
Using the above Mcdonalds financial information, discuss the meaning of the calculated ratios in a general sense and specifically what they mean for the main organization. Also evaluate your calcualted ratios in light of some comparitive standard such as the industry averages or specific competitors (note: I completed the competitive numbers... now just have to analyze).
Discuss: A. Which ratios you would find most useful in making day-to-day management decisions, and why?
B. Which of the ratios you would find most useful in making strategic deicision, and why?