Task (1) Financial Management issues

Your report should include the following:

a) Explanation of the different types of risks faced by McDonald's as a global organisation
(b) Details and examples of the financial management tools that McDonald's uses to mitigate the risks
identified in (a) above (these should be tools that are actually being used by McDonald's, not those that
they might use)
(c) Evaluation of the extent to which the financial management tools identified above help to reduce
McDonald's risk and suggestions of additional tools that the company might use that are not being
currently employed

1. Financial Management Issues

1.1 Interest Rate Risk

Interest rate risks can be understood as the risks that arises from the fluctuating interest rates,
causing in the decline in the value of an asset. The intensity of the risks relies on the sensitivity of the
price of the asset in relation the interest rate changes in the market (1).

1.2 Exchange Rate Risk

The exchange rate risk is also known as currency risk. The exchange rate risks arises when there
is a depreciation in the currency denomination of another country. The risks is applicable to any
company that make monetary transactions in any other countries. Therefore, McDonald is not an
exclusion of such risk (2).

1.3 Political Risk

Political risks are identified as the risks that one could face when the political changes or
instability within a country affects the value of investment returns. Governments of any country could
impose new decisions from time to time, and a variety of these decisions could bring certain impact to
businesses, industries and even the economy (3).
2. Management Accounting Issues
- How McDonald’s Generate Additional Value
- How McDonald’s balances accountability with long run value creation for stakeholders
- How management accounting information develops integrated thinking and better decision
making
http://www.cgma.org/Resources/Reports/Pages/GlobalManagementAccountingPrinciples.aspx?
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Your report should focus on the issues that McDonald's has been facing over the last five years
and the steps the company is taking to tackle these issues. You should refer closely to the Global
Management Accounting Principles and how these can be used to support McDonald's.

Start here:
References
1. https://corporatefinanceinstitute.com/resources/knowledge/finance/interest-rate-risk/
2. https://www.forextraders.com/forex-education/forex-glossary/what-is-currency-risk/
3. https://www.investopedia.com/terms/p/politicalrisk.asp