• Beni Suif University-faculty Of Commerce

• International Accounting And Finance

Program
• (First) Year Students – Second Semester
Group (2)

Project on financial analysis

(Case study)
DR/ Eid Fathi Shaaban

54
54
 ‫االستهالل‪+‬‬
‫قال هللا تعايل‪:‬‬

‫وب}‬‫{اذَّل ِ َين آ َمنُوا َوت َْط َمنِئ ُّ ُقلُوهُب ُ ْم ِب ِذ ْك ِر اهَّلل ِ ۗ َأاَل ِب ِذ ْك ِر اهَّلل ِ ت َْط َمنِئ ُّ الْ ُقلُ ُ‬
‫" سوره الرعد"‪ ...‬اآلية رمق (‪)28‬‬
‫صدق هللا العظمي‪.‬‬

‫‪54‬‬
 ‫إ‪+‬ه‪+‬د‪+‬ا‪+‬ء‪+‬‬
‫_تقدمي عبارات شكر وتعبريات امتنان لأل هل واجب علينا هؤالء اذلين يقفون دو ًما إىل جانبنا‪ H‬ونعمتد علهيم يف مجيع مواقف‬
‫حياتنا‪ ،‬وبدون مساعدهتم ال نستطيع ختطي الكثري من الصعاب اليت تواهجنا يف احلياة إن مل تكن مجيعها‪ ،‬فهم اكألمقار اليت تيضء‬
‫حياتنا وتكون لنا النور واألمل يف أشد األوقات ظلمة وصعوبة‪ .‬بأصدق املشاعر وبأشدّ اللكامت الطيبة النابعة من قلب ويفّ‪،‬‬
‫أقدم شكري وامتناين ملن اكنوا سبب يف اسمترار واستكامل مسرية حيايت‪ ،‬من وقفوا معي بأشدّ الظروف ومن حفزوين عىل‬
‫املثابرة والاسمترار وعدم اليأس‪ ،‬أقدم لمك أمجل عبارات الشكر والامتنان من قلب فاض ابالحرتام والتقدير لمك‪.‬‬
‫_البد لنا وحنن خنطو خطواتنا الاوىل يف احلياة اجلامعية من وقفة نعود إىل أوقات قضيناها يف رحاب اجلامعة مع أساتذتنا‬
‫الكرام اذلين قدموا لنا الكثري ابذلني بذكل هجودا كبرية يف بناء جيل الغد لتبعث األمة من جديد وقبل أن منيض نقدم أمسى آايت‬
‫الشكر والامتنان والتقدير واحملبة إىل اذلين محلوا أقدس رساةل يف احلياة إىل اذلين همدوا لنا طريق العمل واملعرفة‬
‫‪ ‬إىل مجيع أساتذتنا األفاضل‬
‫"كن عاملا فإن مل تستطع فكن متعلام‪ ،‬فإن مل تستطع فأحب العلامء‪ ،‬فإن مل تستطع فال تبغضهم"‬
‫وأخص ابلتقدير والشكر‬
‫ادلكتور‪ /‬عيد فتحي شعبان‬
‫اذلي نقول هل برشاك قول رسول هللا صىل هللا عليه وسمل‬
‫"إن احلوت يف البحر ‪ ،‬والطري يف السامء ‪ ،‬ليصلون عىل معمل الناس اخلري"‬

‫‪54‬‬
 ‫اعضاء لجنة المناقشة والحكم‬
‫وشكر خاص الي اعضاء لجنة المناقشة الكرام‪:‬‬

‫‪ ‬أ‪.‬د‪-‬بدر نبيه "استاذ المراجعة"‬

‫‪ ‬د‪-‬عبد هللا حسين "مدرس المحاسبة بالكلية"‬
‫‪ ‬د‪-‬عيد فتحي شعبان "مدرس المحاسبة بالكلية"‬

‫‪54‬‬
 Table of Contents

Contents Page
Introduction 7
Financial analysis 8
Trend analysis 9
Ratio analysis 10
Introduction to companies 19
Statements of MCD 21
Horizontal analysis for MCD 23
Statements of DOMINO'S PIZZA 28
Horizontal analysis for DOMINO'S PIZZA 31

Comparing between the two companies 35

Vertical analysis of MCD 35
Vertical analysis of DOMINO'S PIZZA 38
Ratio analysis for two companies 40
References 55

54
 Introduction to the project
The main purpose of this study is to determine, forecast, and evaluate the
best economic conditions and company's performance in the future. The other
purpose of this study is to analyze the financial statement and then give
information for financial managers to make decisions about their business. The
financial statement applies tools, analytical techniques, and required methods
for business analysis. It is a diagnostic tool for evaluating financing,
investment, and operational activities and an assessment tool for management
decisions and other business decisions. The financial statements' analysis is
used by managers, shareholders, investors, and all other interested parties
regarding the company's state. Managers use financial reporting to see the
situation in which the company stands and then provide information to
shareholders' equity; to see how reasonable are the investments made in the
company. To potential investors, the financial statements of the company's
analysis are significant; because they want to know the state of the company
and then decide whether to invest or not.

54
 FINANCIAL ANALYSIS
Financial analysis:

1. What is financial analysis? Financial analysis may be misleading without the

knowledge of the changes in accounting procedure followed by a firm is just a study of
reports of the company.
2. Financial analysis: is useful and significant to different users in the following ways:

a. Finance manager
b. Trade payables
c. Lenders
d. Top management
e. Investor

3. The top 4 objectives of Financial Statement Analysis are as follows –

a. To know the current position of the company

b. Eliminating Discrepancies
c. Future Decision Making
d. Minimize the Chances of Fraud

4. Financial analysis is classified into:

a. Trend analysis
b. Ratio analysis

54
  Trend analysis:

What is Trend analysis? Trend analysis is a technique used in technical analysis that
attempts to predict future stock price movements based on recently observed trend data.
Trend analysis uses historical data, such as price movements and trade volume, to forecast
the long-term direction of market sentiment.

The top 4 objectives of Trend Analysis are as follows –

a. To show operational efficiency of the business.
b. To indicate actual and Prospective performance of the business.
c. To indicate profitability and financial soundness of the business.
d. To assist in decision-making.

Trend analysis is classified into:

a. Horizontal analysis
b. Vertical analysis

 Horizontal analysis:

What is Horizontal analysis? Is a technique for evaluating a series of financial

statement data over a period of time.

The top 4 objectives of Horizontal Analysis are as follows –

a. Horizontal Analysis refers to the process of comparing the line of items over the
period, in the comparative financial statement, to track the overall trend and
performance.
b. Horizontal Analysis is undertaken to ascertain how the company performed over the
years or what is its financial status, as compared to the prior period.
c. The primary aim of horizontal analysis is to keep a track on the behavior of the
individual items of the financial statement over the years.
d. Determine the important trends of the company and determine the growth or
expansion of companies, which provides a more accurate picture of the facility's
status and future trends. These ratios are used to assess the extent to of the
management of enterprise has succeeded in managing the assets and liabilities of the
enterprise.

54
  Vertical Analysis:

1. What is Vertical analysis? Is a technique for evaluating financial statement data that
expresses each item in a financial statement as a percentage of a base amount, and made for
comparisons, in which any item on the list to be analyzed is compared to another item, and
thus knowing the relationships between these items.
2. The top three objectives of Vertical Analysis are as follows
a. Vertical analysis is used to report the stakeholder about the portion of line items
to the total, in the current financial year.
b. Aims at showing an insight into the relative importance or proportion of various
items on a particular year’s financial statement.
c. Aims at ascertaining the proportion of items to the common item of the single
accounting year

 Ratio Analysis
1. What Is Ratio Analysis?
 Ratio analysis is a quantitative method of gaining insight into a company's
liquidity, operational efficiency, and profitability by studying its financial
statements such as the balance sheet and income statement
* Ratio analysis expresses the relationship among selected items of financial
statement data*

2. What Does Ratio Analysis Tell You?

 Investors and analysts employ ratio analysis to evaluate the financial health of companies
by scrutinizing past and current financial statements. Comparative data can demonstrate
how a company is performing over time and can be used to estimate likely future
performance. This data can also be used to compare a company's financial standing with
industry averages, while measuring how a company stacks up against others within the
same sector.
3. Ratio Analysis Categories
a. Liquidity Ratios
b. Activity Ratios
c. Coverage Ratios
d. Profitability Ratios
e. Financial structure

54
 1. Liquidity Ratios:
a. What Are Liquidity Ratios? Liquidity refers to the capacity of the business to pay
its short-term liability as and when it becomes due. So, the liquidity Ratios are used to
know the company’s capacity to pay its short-term liabilities. To pay the short term
liabilities means paid the total due amount of short term liabilities by realizing amount
from the company’s current assets.
b. What Does Ratio Analysis Tell You? Liquidity ratio provides us with
information about the liquidity of the business. The high liquidity ratio ensures that
the company is in a good position to meet its financial obligation and the low
liquidity ratio shows the low capacity of the firm to meet its financial obligation and
it will lead to bankruptcy and fall down the credit rating of the business. 
c. The formula of Liquidity Ratios:
1) Current Ratio: The current ratio is used to compare the current assets with
the current liabilities of the business.
Formula to calculate Current Ratio:

2) Quick or liquid Ratio: The Quick or liquid Ratio is used to compare the Liquid
assets with current liabilities of the business.

Formula to calculate Quick or liquid Ratio:

3) Absolute liquid or cash Ratio: The Absolute liquid or cash ratio is used to
compare the Absolute liquid assets with current liabilities of the business.

Formula to calculate Absolute liquid or cash Ratio:

54
 4) Net Working Capital Ratio: the intent is to track the proportion of short term net
funds to assets, usually on a trend line. By doing so, you can tell if a business is
gradually shifting more of its assets into or out of long-term assets, such as fixed assets.
An increasing ratio is considered good, since it implies that a business is minimizing its
investment in fixed assets and keeping its asset reserves as liquid as possible.
Formula to calculate Net Working Capital Ratio:

1.

Assets included in the Current, Liquid and Cash Assets

1.

2. Activity Ratios:
a. What Are Activity Ratios? Activity ratio is used to check out the way of the usage of
resources of the enterprises. It gets to know to related parties the actual performance of the
business. These are also known as performance or turnover ratio.
b. What Does Activity Ratio Analysis Tell You? Activity Ratios are needed to check
out the actual usage of the resources of the business. These all ratios calculated in the form
times. But these all are benefited differently some of them if low then these are better or
some of them when these are high in time then these are better for the business. These are
explained as under:

54
  If the inventory turnover ratio is high, then it is better for business because it shows
more sales from less inventory usage and vice versa. 
 If the trade receivables turnover ratio is high, then it is better for business because it
shows the debts are collected promptly and vice versa.
 If the trade payables turnover ratio is low, then it is better for business because it
shows a longer period to repay the payables and vice versa.
 If the working capital turnover ratio is high, then it is better for business
because it shows the efficient use of working capital and vice versa.  

a.
b.
c. The formula of Activity Ratios:
1) Inventory Turnover Ratio: The Inventory Turnover Ratio is used to know the
relationship between the cost of goods sold and average inventory carries during the year
of the business.

Formula to Calculate Inventory Turnover Ratio:

How to calculate the Average Inventory:

Formula to Calculate Inventory Period:

2) Trade Receivable Turnover Ratio: The Receivable Turnover Ratio is used to know
the relationship between the Net Credit Sales and Average Trade Receivables.

Formula to Calculate Trade Receivable Turnover Ratio:

54
 How to calculate the Average Trade Receivable:

Formula to Calculate Debt Collection Period:

3) Trade Payables Turnover Ratio: The Inventory Turnover Ratio is used to know the
relationship between the Net Credit Purchases and Average Trade Payables.

Formula to Calculate Trade Payables Turnover Ratio:

How to calculate the Average Trade Payables:

Formula to Calculate Average Payment Period:

4) The Working Capital Turnover Ratio: The Working Capital Turnover Ratio is
used to know the relationship between the working capital and total Revenue
from an operation.

54
 5) Fixed asset turnover: This ratio measures how efficiently the company generates
revenues from its investments in fixed assets. Generally higher fixed-asset turnover
ratio indicates more efficient use of fixed assets in generating revenue.

* The best fixed assets turnover ratio is 2.5 or more could be considered good*

6) Total assets turnover: The total asset turnover ratio measures the
company‘s overall ability to generate revenues with a given level of assets.

3. Profitability ratios:
a. What are Profitability ratios? Profitability ratios are a class of financial metrics
that are used to assess a business's ability to generate earnings relative to its revenue,
operating costs, balance sheet assets, or shareholders' equity over time, using data from
a specific point in time.

*The ability to generate profit on capital invested is a key determinant of a

company‘s overall value and the value of the securities it issues Consequently*

b. What Do Profitability Ratios Tell You? For most profitability ratios, having a
higher value relative to a competitor's ratio or relative to the same ratio from a previous
period indicates that the company is doing well. Profitability ratios are most useful
when compared to similar companies, the company's own history, or average ratios for
the company's industry and also helped us in:

 Profitability ratios can be compared with efficiency ratios, which consider how
well a company uses its assets internally to generate income (as opposed to
after-cost profits).
 Profitability ratios assess a company's ability to earn profits from its sales or
operations, balance sheet assets, or shareholders' equity.
 Profitability ratios indicate how efficiently a company generates profit and
value for shareholders.
 Higher ratio results are often more favorable, but these ratios provide much
more information when compared to results of similar companies, the
company's own historical performance, or the industry average.

c. The formula of Profitability ratios:

54
 1) Profit per share (profit margin): the net profit margin shows how much of each
dollar collected by a company as revenue translates into profit.

2) Return on investments (Assets) (ROA): Profitability is assessed relative to

costs and expenses and analyzed in comparison to assets to see how effective a
company is deploying assets to generate sales and profits. The use of the term
"return" in the ROA measure customarily refers to net profit or net income—the
value of earnings from sales after all costs, expenses, and taxes ROA is expressed as
a percentage.

3) Return on equity (ROE): is a measure of financial performance calculated by

dividing net income by shareholders' equity. Because shareholders' equity is equal to a
company’s assets minus its debt, ROE is considered the return on net assets. ROE is
considered a gauge of a corporation's profitability and how efficient it is in generating
profits ROE is expressed as a percentage.

*The more, the better*

4) Sales Profitability ratios : it measure and evaluate the ability of sales to

achieve profit

4. Coverage ratios:

a. What Is a Coverage Ratio? A coverage ratio, broadly, is a metric intended to

measure a company's ability to service its debt and meet its financial obligations,

54
 such as interest payments or dividends. The higher the coverage ratio, the easier
it should be to make interest payments on its debt or pay dividends. The trend of
coverage ratios over time is also studied by analysts and investors to ascertain the
change in a company's financial position.

b. What do coverage ratios tell you? Coverage ratios come in several forms and can
be used to help identify companies in a potentially troubled financial situation, though low
ratios are not necessarily an indication that a company is in financial difficulty. Many
factors go into determining these ratios and a deeper dive into a company's financial
statements is often recommended to ascertain a business's health and can help us in:

 Investors can use coverage ratios in one of two ways. First, they can track changes
in the company’s debt situation over time. In cases where the debt-service coverage
ratio is barely within the acceptable range, it may be a good idea to look at the
company’s recent history. If the ratio has been gradually declining, it may only be a
matter of time before it falls below the recommended figure.
 Coverage ratios are also valuable when looking at a company in relation to its
competitors. Evaluating similar businesses is imperative, because a coverage ratio
that’s acceptable in one industry may be considered risky in another field. If the
business you are evaluating seems out of step with major competitors, it is often a
red flag.
 While comparing the coverage ratios of companies in the same industry or sector
can provide valuable insights into their relative financial positions, doing so across
companies in different sectors is not as useful, since it might be like comparing
apples to oranges.

c. The formula of coverage ratios:

1) Interest Coverage Ratio: The interest coverage ratio measures the ability of a
company to pay the interest expense on its debt. The ratio, is also known as the
times interest earned ratio, measured by times.

* The more the better*

EBIT = Earnings before interest and taxes

54
 *Generally, an interest coverage ratio of at least two (2) is considered the
minimum acceptable amount for a company that has solid, consistent revenues.
Analysts prefer to see a coverage ratio of three (3) or better. *

2) Asset Coverage Ratio: The asset coverage ratio is similar in nature to the debt
service coverage ratio but looks at balance sheet assets instead of comparing
income to debt levels, measured by times.

* The more the better*

*The best number of covering assets rate a rule of thumb ratio ranging from 1.0:1.5 is
acknowledged as being healthy.*

3) Fixed financial expense coverage rate: measures a firm's ability to cover its
fixed charges, such as debt payments, interest expense, and equipment lease
expense. It shows how well a company's earnings can cover its fixed expenses.
Banks often look at this ratio when evaluating whether to lend money to a
business, measured by times

* The more the better*

5. Financial structure:
a. What is a financial structure? Financial structure refers to the mix of debt and
equity. It includes short-term liabilities, short-term debt, long-term debt, and equity that a
business uses to finance its assets, which is used by the company to finance its operations.
This composition directly affects the risk and value of the associated business.
b. What Does financial structure Tell You? The financial structure of a
company referred to as the capital structure. In some cases, evaluating the
financial structure may also include the decision between managing a private or
public business and the capital opportunities that come with each and helped us
to:

54
  Managing the capital structure is primarily the same but the financing options
differ greatly.

c. Sources:
Debt external

Equities internal

d. The formula of financial structure:

1) The equity ratio: is a financial metric that measures the amount of leverage used
by a company. It uses investments in assets and the amount of equity to determine
how well a company manages its debts and funds its asset requirements.

2) The debt ratio: The debt ratio determines the relative proportion of debt to
total assets; it measures the proportion of debt used to finance the company’s
assets. One can evaluate leverage in a firm with the help of this ratio.

*Do balancing between debt ratio and equity ratio is the best *

And based on all the previous words, we applied on two companies Macdonald's and
Domino's Pizza

 Introduction of MCD Company:

 MacDonald “MCD” company is considered one of the companies to maintain

its own position in the list of the best restaurants specializing in serving fast
food around the world as it is one of the international companies that has
achieved great success in this sector. It also has many branches spread all over
the world, as it has branches in more than one hundred twenty countries and
has employed more than one and a half million workers.

54
  Introduction of DOMINO'S PIZZA Company:

 Domino's Pizza is a global pizza delivery company that was founded in 1960
and is the second-largest pizza chain in the United States of America, The
number of cities in which Domino's pizza branches in 94 cities; it has more
than nine thousand branches across 60 countries.

 Employing more than 150,000 people, the second Domino's Pizza restaurant
was launched in 1967, then the third in 1969, and the number of Domino's
Pizza branches quickly reached 44 thousand branches.

 The rapid expansion of Domino's Pizza began, so the number of branches

jumped from 200 in 1978 to 1100 in 1983.

54
 Name date date date
Consolidated Balance Sheet for mac - USD ($) $ in Millions 12 Months Ended
Current assets Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
Cash and equivalents $ 898.50 $ 3,449.10 $ 4,709.20
Accounts and notes receivable $ 2,224.20 $ 2,110.30 $ 1,872.40
Inventories, at cost, not in excess of market $ 50.20 $ 51.10 $ 55.60
Prepaid expenses and other current assets $ 385.00 $ 632.70 $ 511.30
Total current assets $ 3,557.90 $ 6,243.20 $ 7,148.50
Other assets
Investments in and advances to affiliates $ 1,270.30 $ 1,297.20 $ 1,201.20
Goodwill $ 2,677.40 $ 2,773.10 $ 2,782.50
Miscellaneous $ 2,584.00 $ 3,527.40 $ 4,449.50
Total other assets $ 6,531.70 $ 7,597.70 $ 8,433.20
Lease right-of-use asset, net $ 13,261.20 $ 13,827.70 $ 13,552.00
Property and equipment
Property and equipment, at cost $ 39,050.90 $ 41,476.50 $ 41,916.60
Accumulated depreciation and amortization $ (14,890.90) $ (16,518.30) $ (17,196.00)
Net property and equipment $ 24,160.00 $ 24,958.20 $ 24,720.60
Total assets $ 47,510.80 $ 52,626.80 $ 53,854.30
Current liabilities
Accounts payable $ 988.20 $ 741.30 $ 1,006.80
Lease liability $ 621.00 $ 701.50 $ 705.50
Income taxes $ 331.70 $ 741.10 $ 360.70
Other taxes $ 247.50 $ 227.00 $ 236.70
Accrued interest $ 337.80 $ 388.40 $ 363.30
Accrued payroll and other liabilities $ 1,035.70 $ 1,138.30 $ 1,347.00
Current maturities of long term debt $ 59.10 $ 2,243.60 $ 0.00
Total current liabilities $ 3,621.00 $ 6,181.20 $ 4,020.00
long term liabilities
Long-term debt $ 34,118.10 $ 35,196.80 $ 35,622.70
Long-term lease liability $ 12,757.80 $ 13,321.30 $ 13,020.90
Long-term income taxes $ 2,265.90 $ 1,970.70 $ 1,896.80
Deferred revenues - initial franchise fees $ 660.60 $ 702.00 $ 738.30
Other long-term liabilities $ 979.60 $ 1,054.10 $ 1,081.00
Deferred income taxes $ 1,318.10 $ 2,025.60 $ 2,075.60
Total long term liabilities $ 52,100.10 $ 54,270.50 $ 54,435.30
Total liabilities $ 55,721.10 $ 60,451.70 $ 58,455.30
Shareholders' equity (deficit)
Preferred stock, no par value; authorized – 165.0 million shares; issued – $ 0.00 $ 0.00 $ 0.00
none
Common stock, $.01 par value; authorized – 3.5 billion shares; issued – $ 16.60 $ 16.60 $ 16.60
1,660.6 million shares
Additional paid-in capital $ 7,653.90 $ 7,903.60 $ 8,231.60
Retained earnings $ 52,930.50 $ 53,908.10 $ 57,534.70
e balance sheet of MacDonald's
Accumulated other comprehensive income (loss)
Common stock in treasury, at cost; 915.8 and 915.2 million shares
$ (2,482.70)
$ (66,328.60)
$ (2,586.80)
$ (67,066.40)
$ (2,573.70)
$ (67,810.20)
mpany: Total shareholders' equity (deficit)
The balance sheet of MacDonald's company: $ (8,210.30) $ (7,824.90) $ (4,601.00)
Total liabilities and shareholders' equity (deficit) $ 47,510.80 $ 52,626.80 $ 53,854.30

54
 The balance sheet diagram of MacDonald's
company:
$ 150,000.00
$ 50,000.00
$ (50,000.00)

es
s

s
ts
ts

es

s
t

s
os

es
ou

ie

ie

ie

re
se
en

ax

x
li t

li t

lit
$ (150,000.00)

tc

ar
ta

a
ne
as
l

bi

rt

bi

bi
va

sh
sh
a

e
lla

li a

lia

lia
e
nt

t,

m
ui

th

n
n
en
$ (250,000.00)

ce
rre
eq

co

io
nt

nt

io
O
pm
is

il l
re

i ll
re

in
cu

te
d

m
M

m
ur

r
an

rm
ui

cu

ng
l

2
ta

6
eq

5.
-te

0.
h

To

lo
ta
as

91
66
d

ng
To

l
ta
an
C

1,

d
Lo

To

an
rty

–
ed

.8
pe

15
u
o

ss
Pr

;9
;i

st
es

co
ar

at
sh

y,
on

ur
lli

as
bi

tre
5
3.

in
–

k
oc
ed

st
ri z

on
ho

m
ut

om
;a

date 12 Months Ended Dec. 31, 2019 date 12 Months Ended Dec. 31, 2020
ue

C
al
rv

date 12 Months Ended Dec. 31, 2021

Name Date date Date
pa
01

Consolidated Statement of Income for mac - USD ($) shares in

$.

12 Months Ended
Millions, $ in Millions
k,
oc

REVENUES Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
st
on

Sales by Company-operated restaurants $ 9,420.8 $ 8,139.2 $ 9,787.4

m
om

Revenues from franchised restaurants 11,655.7 10,726.1 13,085.4

C

Other Revenues $ 287.9 $ 342.5 $ 350.1

Total revenues 21,364.4 19,207.8 23,222.9
OPERATING COSTS AND EXPENSES
Food & paper 2,980.3 2,564.2 3,096.8
Payroll & employee benefits $ 2,704.4 $ 2,416.4 $ 2,677.2
Occupancy & other operating expenses 2,075.9 2,000.6 2,273.3
Franchised restaurants occupancy expenses $ 2,200.6 $ 2,207.5 $ 2,335.0
Other Expenses 223.8 267.0 260.4
Depreciation, Depletion and Amortization $ 262.5 $ 300.6 $ 329.7
Other Selling, General and Administrative Expense 1,966.9 2,245.0 2,377.8
Other operating (income) expense, net $ (119.8) $ (117.5) $ (483.3)
Total operating costs and expenses 12,294.6 11,883.8 12,866.9
Operating income $ 9,069.8 $ 7,324.0 $ 10,356.0
Interest expense-net of capitalized interest of $6.8, $6.0 and
1,121.9 1,218.1 1,185.8
$7.4
Nonoperation (income) expense, net $ (70.2) $ (34.8) $ 42.3
Income before provision for income taxes 8,018.1 6,140.7 9,127.9
Provision for income taxes $ 1,992.7 $ 1,410.2 $ 1,582.7
Net income 6,025.4 4,730.5 7,545.2

The income statement of MacDonald's company:

The income statement diagram of MacDonald's company:

54
$ 25,000.0
$ 20,000.0
 $ 10,000.0
$ 5,000.0
$ 0.0
$ (5,000.0)

date 12 Months Ended Dec. 31, 2019 date 12 Months Ended Dec. 31, 2020

The horizontal analysis for balance sheet of MacDonald's company:

Dec. 31, Dec. 31,
Consolidated Balance Sheet for mac - USD ($) $ in Millions "+/-" "+/-""
2019 2020
Current assets
Cash and equivalents $ 2,550.60 283.87% $ 424.12%
3,810.70
Accounts and notes receivable $ -113.90 -5.12% $ - -15.82%
351.80
Inventories, at cost, not in excess of market $ 0.90 1.79% $ 10.76%
5.40
Prepaid expenses and other current assets $ 247.70 64.34% $ 32.81%
126.30
Total current assets $ 2,685.30 75.47% $ 100.92%
3,590.60
Other assets
Investments in and advances to affiliates $ 26.90 2.12% $ - -5.44%
69.10
Goodwill $ 95.70 3.57% $ 3.93%
105.10
Miscellaneous $ 943.40 36.51% $ 72.19%

54
 1,865.50
Total other assets $ 1,066.00 16.32% $ 29.11%
1,901.50
Lease right-of-use asset, net $ 566.50 4.27% $ 2.19%
290.80
Property and equipment
Property and equipment, at cost $ 2,425.60 6.21% $ 7.34%
2,865.70
Accumulated depreciation and amortization $-1,627.40 10.93% $- 15.48%
2,305.10
Net property and equipment $ 798.20 3.30% $ 2.32%
560.60
Total assets $ 5,116.00 10.77% $ 13.35%
6,343.50
Current liabilities
Accounts payable $ -246.90 -24.98% $ 1.88%
18.60
Lease liability $ 80.50 12.96% $ 13.61%
84.50
Income taxes $ 409.40 123.42% $ 8.74%
29.00
Other taxes $ -20.50 -8.28% $ - -4.36%
10.80
Accrued interest $ 50.60 14.98% $ 7.55%
25.50
Accrued payroll and other liabilities $ 102.60 9.91% $ 30.06%
311.30
Current maturities of long term debt $ 2,184.50 3696.28 $ - -100.00%
% 59.10
Total current liabilities $ 2,560.20 70.70% $ 11.02%
399.00
long term liabilities
Long-term debt $ 1,078.70 3.16% $ 4.41%
1,504.60
Long-term lease liability $ 563.50 4.42% $ 2.06%
263.10
Long-term income taxes $ -295.20 -13.03% $ - -16.29%
369.10
Deferred revenues - initial franchise fees $ 41.40 6.27% $ 11.76%
77.70
Other long-term liabilities $ 74.50 7.61% $ 10.35%
101.40
Deferred income taxes $ 707.50 53.68% $ 57.47%
757.50
Total long term liabilities $ 2,170.40 4.17% $ 4.48%
2,335.20
Total liabilities $ 4,730.60 8.49% $ 4.91%
2,734.20
Shareholders' equity (deficit)

54
 Preferred stock, no par value; authorized – 165.0 million shares; $ - $ -
issued – none
Common stock, $.01 par value; authorized – 3.5 billion shares; $ - 0.00% $ - 0.00%
issued – 1,660.6 million shares
Additional paid-in capital $ 249.70 3.26% $ 7.55%
577.70
Retained earnings $ 977.60 1.85% $ 8.70%
4,604.20
Accumulated other comprehensive income (loss) $ -104.10 4.19% $ - 3.67%
91.00
Common stock in treasury, at cost; 915.8 and 915.2 million shares $ -737.80 1.11% $- 2.23%
1,481.60
Total shareholders' equity (deficit) $ 385.40 -4.69% $ -43.96%
3,609.30
Total liabilities and shareholders' equity (deficit) $ 5,116.00 10.77% $ 13.35%
6,343.50

After analyzing the horizontal for the list of the private financial position (MCD), it
becomes clear that:
$ 8,000.00
1. The company’s assets can provide the facility $ 7,000.00

with services and benefits in the future and the $ 6,000.00

financial measurement currently with an $ 5,000.00

acceptable degree of confidence and directly or $ 4,000.00

indirectly help in achieving cash flows,

$ 3,000.00

$ 2,000.00
especially current assets whenever the $ 1,000.00

company’s opportunity increases in its activity Total current assets

$ 0.00

The total increase in the current assets of the Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

company:
- From 2019 to 2020 is 2685.30 million represent 75.47%
- From 2019 to 2021 is 3590.60 million represent 100.92%
2. We can conclude that there is a noticeable $ 61,000.00

improvement in the company’s performance, $ 60,000.00

$ 59,000.00

after the financial analysis of the liabilities $ 58,000.00

clause, it became clear that the difference in $ 57,000.00

$ 56,000.00

the total liabilities of the company: $ 55,000.00

$ 54,000.00

$ 53,000.00
Total liabilities
54 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019
 - From 2019 to 2020 is 4730.60 million represent 8.49%
- From 2019 to 2021 is 2734.20 million represent 4.91%
This is a clear indication of the company's efficiency in repaying its debts
3. We also conclude, after the financial analysis, that Total shareholders' equity (deficit)
$ 0.00

$ (1,000.00)
there is an increase in shareholders' equity $ (2,000.00)

-From 2019 to 2020 is 385.40 million represent 4.96%

$ (3,000.00)

$ (4,000.00)

-From 2019 to 2021 is 3609.30 million represent $ (5,000.00)

$ (6,000.00)

43.96% Increasing shareholders’ equity is the $ (7,000.00)

biggest indicator of an increase in the $ (8,000.00)

$ (9,000.00)
percentage of profits Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

The horizontal analysis for income statement of MacDonald’s company:

Name 12 Months Ended

2019-2020 2019-2021
Consolidated Statement of Income for mac - USD ($)
shares in Millions, $ in Millions
value(+/-) percent value(+/-) percent

REVENUES
$ - $
Sales by Company-operated restaurants -13.60% 3.89%
1,281.60 366.60
$
Revenues from franchised restaurants $ -929.60 -7.98% 12.27%
1,429.70
$
Other Revenues $ 54.60 18.96% 21.60%
62.20
$ - $
Total revenues -10.09% 8.70%
2,156.60 1,858.50
OPERATING COSTS AND EXPENSES
$
Food & paper $ -416.10 -13.96% 3.91%
116.50
$ -
Payroll & employee benefits $ -288.00 -10.65% -1.01%
27.20
$
Occupancy & other operating expenses $ -75.30 -3.63% 9.51%
197.40
$
Franchised restaurants occupancy expenses $ 6.90 0.31% 6.11%
134.40
$
Other Expenses $ 43.20 19.30% 16.35%
36.60

54
 $
Depreciation, Depletion and Amortization $ 38.10 14.51% 25.60%
67.20
$
Other Selling, General and Administrative Expense $ 278.10 14.14% 20.89%
410.90
$ -
Other operating (income) expense, net $ 2.30 -1.92% 303.42%
363.50
$
Total operating costs and expenses $ -410.80 -3.34% 4.65%
572.30
$ - $
Operating income -19.25% 14.18%
1,745.80 1,286.20
Interest expense-net of capitalized interest of $6.8, $6.0
$ 96.20 8.57% $ 63.90 5.70%
and $7.4
$ -
Nonoperation (income) expense, net $ 35.40 -50.43%
112.50 160.26%
$
Income before provision for income taxes $ -1,877.40 -23.41% 13.84%
1,109.80
$ -
Provision for income taxes $ -582.50 -29.23% -20.58%
410.00
$
Net income $ -1,294.90 -21.49% 25.22%
1,519.80

The results of HORIZONTAL financial analysis of MCD’S income statement in the

field of fast food showed that
1. where the company’s total revenue : 25,000.0

20,000.0

From 2019 to 2020 is 215.60 M represent -

10.09 % these decreasing in total revenue
15,000.0

because of the covid-19 disaster 10,000.0

5,000.0
From 2019 to 2021 is 1858.50 M represent 8.70
% the company got over this problem and Total revenues
0.0

8,000.0
had increased its total revenue to 23222.9 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

7,000.0

6,000.0

2. the company’s financial position during 3 5,000.0

years has significantly achieved a net 4,000.0

profit: 3,000.0

2,000.0

1,000.0

0.0
54 Net income

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 - From 2019 to 2020 is -1294.90 m represent -21.79 % and these decreasing in
the net profit because of the decreasing in total revenue because of the covid-19
disaster
- From 2019 to 2021 is 1519.80 m represent 25.22 % the company got over this
problem and had increased its profitability to 7545.2
3. The company’s operating income :
- From 2019 to 2020 is -1745.80 M represent - $ 12,000.0

19.25 % and these decreasing because of the $ 10,000.0

decreasing in total revenue because of the

$ 8,000.0
covid-19 disaster
- From 2020 to 2021 is 3032.0 M represent $ 6,000.0

41.40 % the company got over the problem of the $ 4,000.0

last year and by increasing its total revenue and had $ 2,000.0

increased its operating income to 10356

$ 0.0
- From 2019 to 2021 is 1286.20 M represent Operating income

14.18 % Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

The balance sheet of domino’s

pizza company: Dec. 31, Dec. 31, Dec. 31,
Consolidated Balance Sheet - USD ($) $ in Millions
2019 2020 2021
Current assets:
Cash and cash equivalents $ 190.62 $ 168.82 $ 148.16
Restricted cash and cash equivalents $ 209.27 $ 217.45 $ 180.58
Accounts receivable, net of reserves of $1,793 in 2020 and $2,856 in 2019 $ 210.26 $ 244.56 $ 255.33

Inventories $ 52.96 $ 66.68 $ 68.33

Prepaid expenses and other $ 19.13 $ 24.17 $ 27.24
Advertising fund assets, restricted $ 105.39 $ 147.70 $ 180.90
Total current assets $ 787.62 $ 869.38 $ 860.54
Property, plant and equipment:
Land and buildings $ 44.85 $ 88.06 $ 108.37
Leasehold and other improvements $ 164.07 $ 186.46 $ 193.57
Equipment $ 243.71 $ 292.46 $ 312.77
Construction in progress $ 42.71 $ 13.01 $ 27.82
Property, plant and equipment, Gross $ 495.33 $ 579.99 $ 642.53
Accumulated depreciation and amortization $ (252.45) $ (282.63) $ (318.47)
Property, plant and equipment, net $ 242.88 $ 297.36 $ 324.07
Other assets:
Operating lease right-of-use assets $ 228.79 $ 228.27 $ 210.70
Investments in marketable securities, restricted $ 11.98 $ 13.25 $ 15.43

54
Goodwill $ 15.09 $ 15.06 $ 15.03
Capitalized software, net of accumulated amortization $ 73.14 $ 81.31 $ 95.56
Investments $ 0.00 $ 40.00 $ 125.84
Other assets $ 12.52 $ 60.63 $ 22.54
Deferred income taxes $ 10.07 $ 1.90 $ 2.11
Total other assets $ 351.59 $ 400.42 $ 487.21
Total assets $ 1,382.09 $ 1,567.17 $ 1,671.82
Current liabilities:
Current portion of long-term debt $ 43.39 $ 2.86 $ 55.59
Accounts payable $ 111.10 $ 94.50 $ 91.55
Accrued compensation $ 46.21 $ 58.52 $ 59.57
Accrued interest $ 27.88 $ 31.70 $ 37.98
Operating lease liabilities $ 33.32 $ 35.86 $ 37.16
Insurance reserves $ 23.74 $ 26.38 $ 32.59
Advertising fund liabilities $ 101.92 $ 141.18 $ 173.74
Other accrued liabilities $ 66.27 $ 79.84 $ 102.58
Total current liabilities $ 453.83 $ 470.82 $ 590.74
Long-term liabilities:
Long-term debt, less current portion $ 4,071.06 $ 4,116.02 $ 5,014.64
Operating lease liabilities $ 202.73 $ 202.27 $ 184.47
Insurance reserves $ 34.68 $ 37.13 $ 36.91
Deferred income taxes $ 0.00 $ 6.10 $ 3.92
Other accrued liabilities $ 35.56 $ 35.24 $ 50.67
Total long-term liabilities $ 4,344.02 $ 4,396.75 $ 5,290.61
Total liabilities $ 4,797.85 $ 4,867.57 $ 5,881.35
Stockholders' deficit
Common stock, par value $0.01 per share; 170,000,000 shares $ 0.39 $ 0.39 $ 0.36
authorized; 38,868,350 in 2020 and 38,934,009 in 2019 issued and
outstanding
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized, none $ 0.00 $ 0.00 $ 0.00
issued
Additional paid-in capital $ 0.24 $ 5.12 $ 0.84
Retained deficit $ $ $
(3,412.65) (3,303.49) (4,207.92)
Accumulated other comprehensive loss $ (3.74) $ (2.42) $ (2.82)
Total stockholders' deficit $ $ $
(3,415.76) (3,300.41) (4,209.54)
Total liabilities and stockholders' deficit $ 1,382.09 $ 1,567.17 $ 1,671.82

54
 The balance sheet diagram of
domino’s pizza company:
balance sheet diagram
$ 20,000.00
$ 15,000.00
$ 10,000.00
$ 5,000.00
$ 0.00
$ (5,000.00)
ts:

t
t
s

:
es

i
ss

es
es

fic
et
ed
se

d
re

r
ss

liti
$ (10,000.00)

de
liti
te
te
i ct
as

og

ra

bi
in

bi
ic
str

d
lia
str
nt

li a
pr

ne
he

ed
$ (15,000.00)
re
rre

re

rm
in

rm

i
ot

ta
ts,

cr
Cu

s,
n

-te

Re
l

-te
ta
se

Ac
tio

ie

To

ng
ng
rit
as

c
tru

cu

lo
Lo
d

ns

se
n

l
ta
fu

Co

To
le
ng

b
ta
i
tis

ke
er

ar
v
Ad

m
n
i
ts
en
tm
es
v
In

Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021

Name date date date

The income
Consolidated statement
Statement of ($)
of Income - USD domino’s Pizza
shares in Millions, $ inCompany:
12 Months Ended
Millions
Dec. 31, Dec. 31, Dec. 31,
Revenues:
2019 2020 2021
U.S. Stores [Member] | U.S. Company-owned stores [Member] $ 485.57 $ 454 $ 515
U.S. Stores [Member] | U.S. franchise royalties and fees [Member] $ 503.20 429 391
U.S. Stores [Member] | U.S. franchise advertising [Member] $ 462.24 $ 391 $ 359
Supply Chain [Member] $ 2,416.65 2,105 1,943
International Franchise [Member] | International franchise royalties and
$ 249.76 $ 241 $ 225
fees [Member]
total Revenue $ 4,117.41 3,619 3,433
Cost of sales:
Supply Chain [Member] $ 2,143.32 1,870 1,732
U.S. Stores [Member] | U.S. Company-owned stores [Member] $ 379.60 $ 346 $ 398
Total cost of sales $ 2,522.92 2,216 2,130
Gross profit $ 1,594.49 $ 1,402 $ 1,303
General and administrative $ 406.61 382 372
U.S. franchise advertising $ 462.24 $ 391 $ 359
Income from operations $ 725.64 629 572

54
 Name date
2019-2020 2019-2021
Consolidated Statement of Income - USD ($) shares in
Interest income $ 1.65
Millions, $ in Millions value(+/-) percent value(+/-)$ 4 percent$ 3
Interest expense $ (172.17) 151- 146-
Income
Current before
assets:provision for income taxes $ 555.13 $ 483 $ 429
Provision for income
Cash and cash taxes
equivalents $ (21.79) $ 63.83
-11.43% $ (42.46) 82 -22.27% 67
Net income
Restricted cash and cash equivalents $ 8.18 $ 491.30
3.91% $ 401 -13.71%
$ (28.69) $ 362
Accounts receivable, net of reserves of $1,793 in 2020 and $ 34.30 16.31% $ 45.07 21.43%
$2,856 in 2019 The incom
Inventories $ 13.73 25.92% $ 15.37 29.03%
Prepaid expenses and other $ 5.04 26.35% $ 8.11 42.41%
income statement diagram
Advertising fund assets, restricted $ 42.31 40.15% $ 75.52 71.65%
Total current assets $ 10,000.00 $ 81.77 10.38% $ 72.92 9.26%
Property, plant and equipment: $ 6,000.00
Land and buildings $ 43.22 96.37% $ 63.53 141.66%
$ 2,000.00
Leasehold and other improvements $ 22.39 13.64% $ 29.50 17.98%

r]
r]

r]
r]
$ (2,000.00)

be

s
ng
be

be
be

[M s:

e
xe
Equipment $ 48.75 20.00% $ 69.06 28.34%

gi

m
m

es ale

si
em

em
em

ta
ar

co

co
e

rti
M

fs

e
m
Construction in progress $ (29.69) -69.53% $ (14.89) -34.87%
[M

in

in
ve

om
[

to
[

g
es

et
ad
es

es
ng

tin
os

nc
Property, plant and equipment, Gross $ 84.66 17.09% $ 147.20 29.72%

N
fe
or

or

r
si

te
C

ri
er
d

is
st

st
ti

In
an

fo
er

ch
Accumulated depreciation and amortization $ (30.18) 11.95% $ (66.02) 26.15%

p
d

O
v

n
ne

ne

n
es
ad

io
fra
w

Property, plant and equipment, net $ 54.48 22.43% $ 81.18 33.43%

is
lti
e
-o

-o

ov
ya

.
is

.S
ny

ny
h

pr
o

U
Other assets:
nc

r
pa

pa

re
e
fra

is
om

om

fo
Operating lease right-of-use assets $ (0.52) -0.23% $ (18.08) -7.90%
ch

be
.
.S
.C

.C
n
na r] | U

fra

e
Investments in marketable securities, restricted $ 1.27 10.59% $ 3.45 28.80%
.S

.S

m
|U

|U
al

co
be

Goodwill $ (0.03) -0.21% $ (0.06) -0.39%

In
r]

r]
tio
em
be

be

Capitalized software, net of accumulated amortization of $ 8.17 11.16% $ 22.42 30.65%

em

em
[M

er

date 12 Months Ended Dec. 31, 2019 date 12 Months Ended Dec. 31, 2020
nt
s
[M

[M

$124,043 in 2020 and $104,237 in 2019

re

|I
s

date 12 Months Ended Dec. 31, 2021

to

r]
re

re

Investments $ 40.00 40.00% $ 125.84 125.84%

.S

be
to

to
S

em
.S

.S

Other assets $ 48.11 384.23% $ 10.01 79.98%

.
U
.S

.S
[M
U

Deferred income taxes $ (8.17) -81.10% $ (7.96) -79.06%

se

The horiz
hi

Total other assets $ 48.83 13.89% $ 135.62 38.57%

nc

company:
ra
lF

Total assets $ 185.08 13.39% $ 289.72 20.96%

na

Current liabilities:
tio
a
rn

Current portion of long-term debt $ (40.54) -93.42% $ 12.19 28.10%

te
In

Accounts payable $ (16.60) -14.94% $ (19.55) -17.60%

Accrued compensation $ 12.31 26.63% $ 13.35 28.89%
Accrued interest $ 3.81 13.68% $ 10.10 36.23%
Operating lease liabilities $ 2.54 7.63% $ 3.84 11.52%
Insurance reserves $ 2.64 11.13% $ 8.85 37.30%
Advertising fund liabilities $ 39.25 38.51% $ 71.82 70.46%
Other accrued liabilities $ 13.57 20.48% $ 36.31 54.79%
Total current liabilities $ 16.99 3.74% $ 136.91 30.17%
long term liabilities
Long-term debt, less current portion $ 44.96 1.10% $ 943.58 23.18%
Operating lease liabilities $ (0.46) -0.23% $ (18.26) -9.01%
Insurance reserves $ 2.45 7.07% $ 2.24 6.45%
Deferred income taxes
54 $ 6.10 6.10% $ 3.92 3.92%
Other accrued liabilities $ (0.31) -0.89% $ 15.11 42.49%
 After the horizontal analysis of the list of the private financial position
(Domino's pizza), it becomes clear that:
1. The company’s assets can make it expand in its $ 880.00

operational activity While the time passing and $ 860.00

the ability to achieve cash flows, especially $ 840.00

current assets where the total increase in $ 820.00

current assets: $ 800.00

- From 2019 to 2020 is 81.77 million

$ 780.00

represent 10.38%
$ 760.00

$ 740.00
- From 2019 to 2021 is 72.92 million Total current assets

represent 9.26%
Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

2. After the financial analysis of the liabilities $ 7,000.00

clause, it is clear that the company can pay $ 6,000.00

these debts, as the difference in the total $ 5,000.00

liabilities that fall on the company : $ 4,000.00

- From 2019 to 2020 is 69.72 million represent $ 3,000.00

1.45% $ 2,000.00

- From 2019 to 2021 is 1083.50 million $ 1,000.00

represent 22.58% $ 0.00

Total liabilities

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

$ 0.00
Total stockholders' deficit
3. After the financial analysis concerning $ (500.00)

shareholders' equity, it becomes clear that the $ (1,000.00)

difference in total shareholders' equity :

$ (1,500.00)

$ (2,000.00)
- From 2019 to 2020 is 115.35 million $ (2,500.00)

represent -3.38% $ (3,000.00)

- From 2019 to 2021 is 793.78 million $ (3,500.00)

represent 23.24% $ (4,000.00)

$ (4,500.00)

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

The horizontal analysis for income statement of domino’s Pizza

company:
54
 Name 12 Months Ended
2019-2020 2019-2021
Consolidated Statement of Income - USD ($) shares in
Millions, $ in Millions value(+/-) percent value(+/-) percent
Revenues:
U.S. Stores [Member] | U.S. Company-owned stores $
$ -32.01 -6.59% 6.02%
[Member] 29.24
U.S. Stores [Member] | U.S. franchise royalties and fees $ -
$ -74.69 -14.84% -22.20%
[Member] 111.70
$ -
U.S. Stores [Member] | U.S. franchise advertising [Member] $ -71.44 -15.46% -22.44%
103.71
$ -
Supply Chain [Member] $ -311.72 -12.90% -19.59%
473.35
International Franchise [Member] | International franchise royalties and $ -
fees [Member]
$ -8.78 -3.52% -10.01%
25.01
$ -
total Revenue $ -498.64 -12.11% -16.63%
684.54
Cost of sales:
$ -
Supply Chain [Member] $ -273.21 -12.75% -19.19%
411.29
U.S. Stores [Member] | U.S. Company-owned stores $
$ -33.43 -8.81% 4.89%
[Member] 18.56
$ -
Total cost of sales $ -306.64 -12.15% -15.57%
392.73
$ -
Gross profit $ -191.99 -12.04% -18.30%
291.81
$ -
General and administrative $ -24.32 -5.98% -8.40%
34.15
$ -
U.S. franchise advertising $ -71.44 -15.46% -22.44%
103.71
$ -
Income from operations $ -96.24 -13.26% -21.22%
153.95
144.74 $ 101.57
Interest income $ 2.39
% 1.68 %
$
Interest expense $ 21.35 -12.40% -15.00%
25.82
$ -
Income before provision for income taxes $ -72.49 -13.06% -22.78%
126.45
$
Provision for income taxes $ 18.09 28.35% 4.50%
2.87 $ 4,200.00

$ -
Net income $ -90.59 -18.44% -26.32% $ 4,000.00
129.32
$ 3,800.00

$ 3,600.00
The results of horizontal financial analysis of the income
statement showed that $ 3,400.00

$ 3,200.00

54 $ 3,000.00
total Revenue

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 1. The total revenues are decreasing which confirms the fails of the financial
management of the company to manage the problems and disasters :
- From 2019 to 2020 is -498.64 represent 12.11 % these decreasing in total
revenue because of the covid-19 disaster
- From 2019 to 2021 is -684.54 represent 16.63 % these decreasing in total
revenue because of the company couldn’t get over the covid-19 disaster
800

2. The company’s operating income : 700

600

-From 2019 to 2020 is -96.24 M represent - 500

13.26 % and these decreasing because of the 400

decreasing in total revenue 300

200

-From 2019 to 2021 is -153.95 M represent - 100

21.22 % and these decreasing because of the Income from operations

0

continuously decreasing in total revenue Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

3. the company’s financial position during 3 years has significantly achieved a net
profit:
$ 600
-From 2019 to 2020 is -90.59 m represent -
18.44% and these decreasing in the net $ 500

profit because of the decreasing $ 400

$ 300
in total revenue because of the covid-19
disaster $ 200

$ 100
-From 2019 to 2021 is -129.32 m represent
26.32 % the company could not get over this Net income
$0

problem because of continuously decreasing Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

in total revenue because of the company could not get over the covid-19 disaster

The comparison of the two companies in three items from the horizontal
analysis of income statement:
item mac 2019-2020 mac 2019-2021 dominos 2019-2020 dominos 2019-2021
Total revenues -10.09% 8.70% -12.11% -16.63%

54
 Income from operations -19.25% 14.18% -13.26% -21.22%

Net income -21.49% 25.22% -18.44% -26.32%

When we compare the two companies, we will find that

-McDonald's has overcome the Covid-19 disaster in 2021 and that Domino's Pizza
Company could not, which indicates to the efficient financial management of
MacDonald’s company and the inefficient financial management of domino’s pizza
company

The vertical analysis for balance sheet of MacDonald's company:

Name date date date
Consolidated Balance Sheet for mac - USD ($) $ in
Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
Millions
Current assets to to total to to total to to total
Current assets Current assets Current assets
assets assets assets
Cash and equivalents 25.25% 1.89% 55.25% 6.55% 65.88% 8.74%
Accounts and notes receivable 62.51% 4.68% 33.80% 4.01% 26.19% 3.48%
Inventories, at cost, not in excess of market 1.41% 0.11% 0.82% 0.10% 0.78% 0.10%

Prepaid expenses and other current assets 10.82% 0.81% 10.13% 1.20% 7.15% 0.95%

Total current assets 100.00% 7.49% 100.00 11.86% 100.00% 13.27%

%
Other assets  To
 To other To total To total  To other To total
other
assets assets assets assets assets
assets
Investments in and advances to affiliates 19.45% 2.67% 17.07% 2.46% 14.24% 2.23%

Goodwill 40.99% 5.64% 36.50% 5.27% 32.99% 5.17%

Miscellaneous 39.56% 5.44% 46.43% 6.70% 52.76% 8.26%
Total other assets 100.00% 13.75% 100.00 14.44% 100.00% 15.66%
%
Lease right-of-use asset, net 27.91% 26.28% 25.16%
Property and equipment
Property and equipment, at cost - - -
Accumulated depreciation and amortization - - -

54
Net property and equipment 50.85% 47.42% 45.90%
Total assets 100.00% 100.00% 100.00%
Current liabilities  To
To To total To total  To To total
current
current liabilitie liabilitie current liabilitie
liabilitie
liabilities s s liabilities s
s
Accounts payable 27.29% 1.77% 11.99% 1.23% 25.04% 1.72%
Lease liability 17.15% 1.11% 11.35% 1.16% 17.55% 1.21%
Income taxes 9.16% 0.60% 11.99% 1.23% 8.97% 0.62%
Other taxes 6.84% 0.44% 3.67% 0.38% 5.89% 0.40%
Accrued interest 9.33% 0.61% 6.28% 0.64% 9.04% 0.62%
Accrued payroll and other liabilities 28.60% 1.86% 18.42% 1.88% 33.51% 2.30%
Current maturities of long term debt 1.63% 0.11% 36.30% 3.71% 0.00% 0.00%
Total current liabilities 100.00% 6.50% 100.00 10.23% 100.00% 6.88%
%
long term liabilities To total To long To total To total
To long To long
liabilitie liabilitie liabilitie liabilitie
liabilities liabilities
s s s s
Long-term debt 65.49% 61.23% 64.85% 58.22% 65.44% 60.94%
Long-term lease liability 24.49% 22.90% 24.55% 22.04% 23.92% 22.27%
Long-term income taxes 4.35% 4.07% 3.63% 3.26% 3.48% 3.24%
Deferred revenues - initial franchise fees 1.27% 1.19% 1.29% 1.16% 1.36% 1.26%

Other long-term liabilities 1.88% 1.76% 1.94% 1.74% 1.99% 1.85%

Deferred income taxes 2.53% 2.37% 3.73% 3.35% 3.81% 3.55%
Total long term liabilities 100.00% 93.50% 100.00 89.77% 100.00% 93.12%
%
Total liabilities 117.28% 100.00 114.87 100.00 108.54% 100.00%
% % %
Shareholders' equity (deficit)
Preferred stock, no par value; authorized – 165.0 million
- - -
shares; issued – none
Common stock, $.01 par value; authorized – 3.5 billion
-0.20% -0.21% -0.36%
shares; issued – 1,660.6 million shares
Additional paid-in capital -93.22% -101.01% -178.91%
Retained earnings -644.68% -688.93% -1250.48%
Accumulated other comprehensive income (loss) 30.24% 33.06% 55.94%

Common stock in treasury, at cost; 915.8 and 915.2 million 807.87% 857.09% 1473.81%
shares
Total shareholders' equity (deficit) 100.00% 100.00 -14.87% 100.00% -8.54%
-17.28%
%
Total liabilities and shareholders' equity (deficit) 100.00% 100.00 100.00 100.00 100.00% 100.00%
% % %

14.00%

After analyzing the statement of financial 12.00%

position for (MCD), it becomes clear that: 10.00%

8.00%
1. The company’s assets are sufficient to make it
6.00%
able to expand its operational activity,
4.00%
accepting the development of a new product,
2.00%

54 0.00%
Total current assets

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 as evidenced by an increase in the percentage of current assets as well as the
increase of the current assets increases also its chance of maintaining the growth
of its activity in the company.

The vertical analysis for income statement of MacDonald's

company:
Name Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
Consolidated Statement of Income - USD ($) shares in Millions, $ in
12 Months Ended
Millions
REVENUES Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
Sales by Company-operated restaurants 44.10% 42.37% 42.15%
Revenues from franchised restaurants 55% 56% 56%
Other Revenues 1% 2% 2%
Total revenues 100% 100% 100%
OPERATING COSTS AND EXPENSES
Food & paper 14% 13% 13%
Payroll & employee benefits 13% 13% 12%
Occupancy & other operating expenses 10% 10% 10%
Franchised restaurants occupancy expenses 10% 11% 10%
Other Expenses 1% 1% 1%
Depreciation, Depletion and Amortization 1% 2% 1%
Other Selling, General and Administrative Expense 9% 12% 10%
Other operating (income) expense, net -1% -1% -2%
Total operating costs and expenses 58% 62% 55%
Operating income 42% 38% 45%
Interest expense-net of capitalized interest of $6.8, $6.0 and $7.4 5% 6% 5%
Nonoperation (income) expense, net 0% 0% 0%
Income before provision for income taxes 38% 32% 39%
Provision for income taxes 9% 7% 7%
Net income 28% 25% 32%

The vertical analysis for balance sheet of domino’s pizza company:

Name date date date

Consolidated Balance Sheet - USD ($) $ in Millions Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021

Current assets: to to total to to total to to total

Current assets Current assets Current assets
assets assets assets
Cash and cash equivalents 24.20% 13.79% 19.42% 10.77% 17.22% 8.86%

54
Restricted cash and cash equivalents 26.57% 15.14% 25.01% 13.88% 20.98% 10.80%
Accounts receivable, net of reserves of $1,793 in 2020 and $2,856 26.70% 15.21% 28.13% 15.61% 29.67% 15.27%
in 2019
Inventories 6.72% 3.83% 7.67% 4.26% 7.94% 4.09%
Prepaid expenses and other 2.43% 1.38% 2.78% 1.54% 3.17% 1.63%
Advertising fund assets, restricted 13.38% 7.63% 16.99% 9.42% 21.02% 10.82%
Total current assets 100.00 56.99% 100% 55.47% 100% 51.47%
%
Property, plant and equipment: to to total to to total to to total
proper assets property assets proper assets
ty ty
Land and buildings 6.07% 3.24% 10.04% 5.62% 11.21% 6.48%
Leasehold and other improvements 22.23% 11.87% 21.25% 11.90% 20.03% 11.58%
Equipment 33.01% 17.63% 33.33% 18.66% 32.36% 18.71%
Construction in progress 5.78% 3.09% 1.48% 0.83% 2.88% 1.66%
Property, plant and equipment, Gross - 35.84% - - 38.43%
Accumulated depreciation and amortization - - - - - -19.05%
18.27%
Property, plant and equipment, net 32.90% 17.57% 33.89% 18.97% 33.53% 19.38%
total Property, plant and equipment: 100.00 53.41% 100% 55.98% 100% 57.82%
%
Other assets: to to total to other to total to to total
other assets assets other assets
Operating lease right-of-use assets 65.07% 16.55% 57.01% 14.57% 43.25% 12.60%
Investments in marketable securities, restricted 3.41% 0.87% 3.31% 0.85% 3.17% 0.92%
Goodwill 4.29% 1.09% 3.76% 0.96% 3.09% 0.90%
Capitalized software, net of accumulated amortization 20.80% 5.29% 20.31% 5.19% 19.61% 5.72%
Investments 0.00% 0.00% 9.99% 2.55% 25.83% 7.53%
Other assets 3.56% 0.91% 15.14% 3.87% 4.63% 1.35%
Deferred income taxes 2.86% 0.73% 0.48% 0.12% 0.43% 0.13%
Total other assets 100.00 25.44% 100.00% 25.55% 100.00 29.14%
% %
Total assets 100.00 100.00 100.00% 100.00 100.00 100.00%
% % % %
Current liabilities:
Current portion of long-term debt 9.56% 0.90% 0.61% 0.06% 9.41% 0.95%
Accounts payable 24.48% 2.32% 20.07% 1.94% 15.50% 1.56%
Accrued compensation 10.18% 0.96% 12.43% 1.20% 10.08% 1.01%
Accrued interest 6.14% 0.58% 6.73% 0.65% 6.43% 0.65%
Operating lease liabilities 7.34% 0.69% 7.62% 0.74% 6.29% 0.63%
Insurance reserves 5.23% 0.49% 5.60% 0.54% 5.52% 0.55%
Advertising fund liabilities 22.46% 2.12% 29.98% 2.90% 29.41% 2.95%
Other accrued liabilities 14.60% 1.38% 16.96% 1.64% 17.36% 1.74%
Total current liabilities 100.00 9.46% 100.00% 9.67% 100.00 10.04%
% %
Long-term liabilities:
Long-term debt, less current portion 93.72% 84.85% 93.61% 84.56% 94.78% 85.26%

54
Operating lease liabilities 4.67% 4.23% 4.60% 4.16% 3.49% 3.14%
Insurance reserves 0.80% 0.72% 0.84% 0.76% 0.70% 0.63%
Deferred income taxes 0.00% 0.00% 0.14% 0.13% 0.07% 0.07%
Other accrued liabilities 0.82% 0.74% 0.80% 0.72% 0.96% 0.86%
Total long-term liabilities 100.00 90.54% 100.00% 90.33% 100.00 89.96%
% %
Total liabilities 100.00 347.14 100.00% 310.60 100.00 351.79%
% % % %
Stockholders' deficit
Common stock, par value $0.01 per share; 170,000,000 shares authorized; -0.01% 0.03% -0.01% 0.02% -0.01% 0.02%
38,868,350 in 2020 and 38,934,009 in 2019 issued and outstanding
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized, - - - - - -
none issued
Additional paid-in capital -0.01% 0.02% -0.16% 0.33% -0.02% 0.05%
Retained deficit 99.91% - 100.09% - 99.96% -
246.92 210.79 251.70%
% %
Accumulated other comprehensive loss 0.11% -0.27% 0.07% -0.15% 0.07% -0.17%
Total stockholders' deficit 100.00 - 100.00% - 100.00 -
% 247.14 210.60 % 251.79%
% %
Total liabilities and stockholders' deficit 100.00 100.00 100.00% 100.00 100.00 100.00%
% % % %

The vertical analysis for income statement of domino’s pizza company:

Consolidated Statement of Income - USD ($) shares in Millions,
Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021
$ in Millions
Revenues:
U.S. Stores [Member] | U.S. Company-owned stores [Member] 11.79% 12.53% 15.00%
U.S. Stores [Member] | U.S. franchise royalties and fees
12.22% 11.84% 11.40%
[Member]
U.S. Stores [Member] | U.S. franchise advertising [Member] 11.23% 10.80% 10.44%
Supply Chain [Member] 58.69% 58.17% 56.61%
International Franchise [Member] 6.07% 6.66% 6.55%
total Revenue 100.00% 100.00% 100.00%
Cost of sales:
Supply Chain [Member] 52.06% 51.68% 50.45%
U.S. Stores [Member] | U.S. Company-owned stores [Member] 9.22% 9.57% 11.60%
Total cost of sales 61.27% 61.24% 62.05%
Operating margin 38.73% 38.76% 37.95%
General and administrative 9.88% 10.56% 10.85%
U.S. franchise advertising 11.23% 10.80% 10.44%
Income from operations 17.62% 17.39% 16.65%

54
 Interest income 0.04% 0.11% 0.10%
Interest expense -4.18% -4.17% -4.26%
Income before provision for income taxes 13.48% 13.34% 12.49%
Provision for income taxes 1.55% 2.26% 1.94%
Net income 11.93% 11.07% 10.54%

ratios name MacDonald’s domino's pizza

Dec.
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
liquidity ratio 31,
2019 2020 2021 2019 2020
2021
current ratio 0.983 1.010 1.778 1.735 1.847 1.457
quick ratio 0.862 0.899 1.637 1.577 1.654 1.295
cash ratio 0.248 0.558 1.171 0.420 0.359 0.251
Net Working Capital Ratio -0.001 0.001 0.058 0.242 0.254 0.161
activity ratio

Average Inventory: 50.650 50.650 53.350 49.465 59.819 67.506

Inventory Turnover 196.667 181.416 194.607 51.004 37.050 31.556
Inventory Period 1.831 1.984 1.850 7.058 9.717 11.408
249.94
Average Trade Receivable 2332.850 2167.250 1991.350 200.176 227.410 4
Trade Receivable Turnover 9.158 8.863 11.662 20.569 15.913 13.735
Debt Collection Period 39.310 40.619 30.870 17.502 22.623 26.211
The table of ratios analysis for the two
Average Trade Payables companies:
1098.050 864.750 874.050 108.998 102.800 93.023
Trade Payables Turnover 2.714 2.965 3.543 19.664 18.192 18.619
Average Payment Period 132.637 121.406 101.607 18.308 19.789 19.335
6.005 3.077 3.249 5.228 4.162 3.989
Working Capital Turnover

Or
3.456 1.903 1.800 3.203 2.549 2.475
Working Capital Turnover
Fixed Assets Turn over 0.884 0.770 0.939 16.952 12.170 10.593
Total assets Turn over 0.450 0.365 0.431 2.979 2.309 2.053
coverage ratio

covering interest rate 8.08 6.01 8.73 4.22 4.20 3.93

covering fixed financial expense rate 8.08 6.01 8.73 4.22 4.20 3.93
covering assets rate 0.79 0.77 0.85 0.19 0.23 0.18

54
 finance structure ratio

debit ratio 117% 115% 109% 347% 311% 352%

equity ratio -17% -15% -9% -247% -211% -252%
profitability ratio
2.88997 2.1292
profit per share 6.584 5.169 8.244 6 2.357112 47
assets profitability 13% 9% 14% 36% 26% 22%
equity profitability -73% -60% -164% -14% -12% -9%
sales profitability 28% 25% 32% 12% 11% 11%

The results of ratio financial analysis:

1. The analysis of liquidity ratio:

1) First, we must know that the good current liquidity ratio is between 1.2: 2,
which indicates that a company is having a sound financial position and can meet
short-term liabilities efficiently.
a) The current ratio in MCD Company in:
- 2019 is 0.983 and which means that the ratio is less than the normal ratio
(1.2: 2). *It is a weakness point* current ratio
- 2020 is 1.010 and still less than the 2.000

normal ratio (1.2:2) *It is a weakness 1.800

1.600
point*
1.400
- 2021 is 1.778 here we see that we have 1.200

terrible variation and in this year we 1.000

0.800
achieved the normal ratio (1.2:2). *It is a 0.600
strength point * 0.400

b) the current ratio in DOMINOS PIZZA 0.200

0.000
company in : domino's pizza macdonald's

- 2019 is 1.735 so here we see that in this year, Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

we achieved the normal ratio (1.2:2). *It is a strength point*

- 2020 is 1.847 so here we see that in this year, we achieved the normal ratio (1.2:2).
*It is a strength point *
- 2021 is 1.457 so here we see that in this year, we achieved the normal ratio (1.2:2).
*It is a strength point*
2) the best quick liquidity ratio is greater than or =1

54
 a) the quick ratio in MCD company in:
- 2019 is 0.862 and it means that the ratio is less than the normal ratio
greater than or =1.* It is a weakness point*
- 2020 is 0.899 and still less than the
normal ratio greater than or =1 * It is a quick ratio
weakness point* 1.800

1.600
- 2021 is 1.637 so here we notice that we 1.400
have terrible variation and this enquire 1.200

the normal ratio greater than or =1 *It 1.000

0.800
is a strength point *
0.600
b) the quick ratio in DOMINOS PIZZA 0.400

company in: 0.200

- 2019 is 1.577. So here we see that in this domino's pizza macdonald's

0.000

year we achieved the normal ratio greater Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

than or = 1 *It is a strength point *

- 2020 is 1.654 so here we see that in this year we achieved the normal ratio
greater than or =1 *It is a strength point *
- 2021 is 1.295 so here we notice that we have terrible variation and this enquire
the normal ratio greater than or =1 *It is a strength point*
3) Although there is no ideal figure, a good cash liquidity ratio is 0.5: 1 is usually
preferred.

a) the cash ratio in MCD company in :

- 2019 is 0.248 and it means that the ratio is less than the normal ratio (0.5:1). *
It is a weakness point*
- 2020 is 0.558 so here we notice that we have terrible variation and this
acquire the normal ratio (0.5:1). *It is a
cash ratio
strength point * 1.400
- 2021 is 1.171 so here we notice that we 1.200
have terrible variation and this acquire 1.000

the normal ratio (0.5:1). * It is a 0.800

strength point* 0.600

0.400

0.200

0.000
domino's pizza macdonald's

54 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 b) the cash ratio in DOMINOS PIZZA company in :
- 2019 is 0.420 and it means that the ratio is less than the normal ratio
(0.5:1) it is a weakness point
- 2020 is is 0.359 and it means that the ratio is less than the normal ratio
( 0.5 :1) it is a weakness point
- 2021 is 0.251 and it means that the ratio is less than the normal ratio
( 0.5 : 1) it is a weakness point

4) Although there is no ideal figure, a net working capital ratio is (1.5: 2.12). is
usually preferred.
a) the net working capital ratio in MCD company in :
- 2019 is -0.001 and it means that the ratio is
less than the normal ratio (1.5: 2.12). * It is Net Working Capital Ratio
a weakness point* 0.300

- 2020 is 0.001 and it means that the ratio is 0.250

less than the normal ratio (1.5:2.12). * It is 0.200

a weakness point* 0.150

- 2021 is 0.058 is less than the normal ratio 0.100

(1.5:2.12). * It is a weakness point* 0.050

b) the net working capital ratio in DOMINOS 0.000
PIZZA company in : domino's pizza macdonald's
-0.050
- 2019 is 0.242 and it means that the ratio is less
Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019
than the normal ratio (1.5: 2.12). * It is a
weakness point*
- 2020 is 0.254 and it means that the ratio is less than the normal ratio (1.5:2.12). * It is a
weakness point*
- 2021 is 0.161 and it means that the ratio is less than the normal ratio (1.5:2.12). * It is a
weakness point*

54
 2. The analysis of activity ratio:

1) For most industries, the ideal inventory turnover ratio will be between 5 and
10, meaning the company will sell and restock inventory roughly every one to
two months.
a) the inventory turnover ratio in MCD company in :
- 2019 is 196.67 and it means that the ratio is more than the normal ratio (5: 10). * It
is a strength point*
- 2020 is 181.42 and it means that the ratio
inventory turnover
is more than the normal ratio (5: 10). * It is
250.000
a strength point*
- 2021 is 194.61 and it means that the ratio 200.000
is more than the normal ratio (5: 10). * It is
a strength point* 150.000

b) the inventory turnover ratio in

100.000
domino’s pizza company in :
- 2019 is 51.004 and it means that the ratio is 50.000

more than the normal ratio (5: 10). * It is a

0.000
strength point* domino's pizza macdonald's

- 2020 is 37.050 and it means that the ratio is Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019
more than the normal ratio (5: 10). * It is a
strength point*
- 2021 is 31.556 and it means that the ratio is more than the normal ratio (5: 10). * It
is a strength point*

2) inventory period ratio: Inventory Period

a) the inventory period ratio in MCD 12.000

company in : 10.000

- 2019 is 1.831 8.000

- 2020 is 1.984
6.000
- 2021 is 1.850
b) the inventory period ratio in domino’s 4.000

pizza company in : 2.000

- 2019 is 7.058 0.000

- 2020 is 9.717 domino's pizza macdonald's

- 2021 is 11.408 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

54
 3) We must know the accurate ratio of trade receivable turnover ratio is 7.8 has
more analytical value in :
a) the trade receivable turnover ratio in MCD company in :
- 2019 is 9.158 so here we notice that this acquire the normal ratio (7.8). *It
is a strength point *
- 2020 is 8.863 so here we notice that this acquire the normal ratio (7.8). *It
is a strength point *
- 2021 is is 11.662 so here we notice that we have terrible variation and this
acquire the normal ratio (7.8).
Trade Receivable Turnover

b) the trade receivable turnover ratio in 25.000

domino’s pizza company in : 20.000

- 2019 is 20.569 so here we notice that this

15.000
acquire the normal ratio (7.8). *It is a strength
point * 10.000
- 2020 is 15.913 so here we notice that this
acquire the normal ratio (7.8). *It is a strength 5.000

point *
0.000
- 2021 is 13.735 so here we notice that this domino's pizza macdonald's

acquire the normal ratio (7.8). *It is a strength Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

point *
4) debt collection period :
a) the debt collection period in MCD
Debt Collection Period
company in : 25.000
- 2019 is 39.310
- 2020 is 40.619 20.000

- 2021 is 30.870 15.000

b) the debt collection period in domino’s

10.000
pizza company in :
- 2019 is 17.502 5.000
Average Payment Period
- 2020 is 22.623 0.000
140.000
domino's pizza macdonald's
- 2021 is 26.211 120.000
Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019
5) average payment period: 100.000

a) the average payment period in MCD 80.000

company in : 60.000

- 2019 is 132.637 40.000

20.000

54 0.000
domino's pizza macdonald's

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 - 2020 is 121.406
- 2021 is 101.607
b) The average payment period in domino’s pizza company in :
- 2019 is 18.308
- 2020 is 19.789
- 2021 is 19.335

6) The working capital turnover ratio is between (1.5: 2):

a) The working capital turnover ratio in MCD company :
- In 2019 is 6.005 it means that the ratio is less than the normal ratio (1.5:2). *
It is a weakness point*
- In 2020 is 3.007 it means that the ratio is Working Capital Turnover
less than the normal ratio (1.5:2). * It is a 7.000

weakness point* 6.000

- In 2021 is 3.249 it means that the ratio is 5.000

less than the normal ratio (1.5:2). * It is a 4.000

weakness point* 3.000

b) The working capital turnover ratio in 2.000

DOMINO'S PIZZA company : 1.000

0.000
- In 2019 is 5.228 it means that the ratio is domino's pizza macdonald's

more than the normal ratio (1.5:2). * It is a Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

strength point*
- In 2020 is 4.162 it means that the ratio is more than the normal ratio (1.5:2).
* It is a strength point*
- In 2021 is 3.989 it means that the ratio is more than the normal ratio (1.5:2).
* It is a strength point* Fixed Assets Turn over
7) The best fixed assets turnover ratio is 2.5 18.000

or more could be considered good 16.000

a) The fixed assets turnover ratio in MCD 14.000

12.000
company : 10.000
- in 2019 is 0.884 and it means that the 8.000

ratio is less than the normal ratio (2.5 or 6.000

more). * It is a weakness point* 4.000

2.000

0.000
54 domino's pizza macdonald's

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 - in 2020 is 0.770 and it means that the ratio is less than the normal ratio (2.5 or
more). * It is a weakness point*
- in 2021 is 0.939 and it means that the ratio is less than the normal ratio (2.5 or
more). * It is a weakness point*
b) The fixed assets turnover ratio in DOMINO'S PIZZA company :
- in 2019 is 16.952 and it means that the ratio is balanced with the normal ratio
(2.5 or more). *It is a strength point*
- in 2020 is 12.170 and it means that the ratio is balanced with the normal ratio
(2.5 or more). *It is a strength point*
- in 2021 is 10.593 and it means that the ratio is balanced with the normal ratio
(2.5 or more). *It is a strength point*
8) The total asset turnover ratio varies so much between companies in different
sectors; there is no universally defined figure for a “good” asset turnover ratio.
a) The total asset turnover ratio in MCD company :
- 2019 0.450 Total assets Turn over
- 2020 0.365 3.500
- 2021 0.431 3.000
b) The total assets turnover ratio in 2.500
DOMINO'S PIZZA company : 2.000
- 2019 2.979 1.500
- 2020 2.309 1.000
- 2021 2.053
0.500

0.000
domino's pizza macdonald's

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

3. The analysis of Coverage ratio:

1) Covering interest rate: Generally, an interest coverage ratio of at least two
(2) is considered the minimum acceptable amount for a company that has
solid, consistent revenues. Analysts prefer to see a coverage ratio of three (3)
or better, the more efficient the company is at generating profits.
a) The Covering interest rate in MCD company :
- in 2019 is 8.08 and it means that the ratio is more than the normal ratio
(2:3 or more). *It is a strength point*
54
 - in 2020 is 6.01 and it means that the ratio is more than the normal ratio
(2:3 or more). *It is a strength point*
- in 2021 is 8.73 and it means that the ratio is more than the normal ratio
(2:3 or more). *It is a strength point*
b) The Covering interest rate in
covering interest rate
DOMINO'S PIZZA company : 10.00
9.00

- in 2019 is 4.22 and it means that 8.00

7.00
the ratio is more than the normal 6.00

ratio (2:3 or more). *It is a 5.00

strength point * 4.00

3.00
- in 2020 is 4.20 and it means that 2.00

the ratio is more than the normal 1.00

0.00
ratio (2:3 or more). *It is a domino's pizza macdonald's

strength point * Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

- in 2021 is 3.93 and it means that the ratio is more than the normal ratio
(2:3 or more). *It is a strength point *

2) Covering fixed financial expense rate: a good fixed charge coverage ratio is
equal to or greater than 1:1.25.
a) The Covering fixed financial expense rate in MCD company :
- in 2019 is 8.08 and it means that the ratio is more than the normal (1:1.25
or more). *It is a strength point * Covering fixed financial expense rate
- in 2020 is 6.01 and it means that the 10.00
ratio is more than the normal ratio 9.00

(1:1.25 or more). *It is a strength 8.00

7.00
point * 6.00

- in 2021 is 8.73 and it means that the 5.00

ratio is more than the normal ratio 4.00

3.00
(1:1.25 or more). *It is a strength 2.00

point. 1.00
0.00
b) The Covering fixed financial expense domino's pizza macdonald's

rate in DOMINO'S PIZZA company : Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

54
 - in 2019 is 4.22 and it means that the ratio is more than the normal (1:1.25
or more). *It is a strength point *
- in 2020 is 4.20 and it means that the ratio is more than the normal ratio
(1:1.25 or more). *It is a strength point *
- in 2021 is 3.93 and it means that the ratio is more than the normal ratio
(1:1.25 or more). *It is a strength point *
3) Covering assets rate: The best number of covering assets rate a rule of thumb
ratio ranging from 1.0:1.5 is knowledge as being healthy.
a) The Covering assets rate in MCD company :
- in 2019 is 0.79 and it means that the
covering assets rate
ratio is less than the normal ratio 0.90
(1.0:1.5). * It is a weakness point* 0.80

- in 2020 is 0.77 and it means that the 0.70

ratio is less than the normal ratio 0.60

0.50
(1.0:1.5). * It is a weakness point* 0.40
- in 2021 is 0.85 and it means that the 0.30

ratio is less than the normal ratio 0.20

(1.0:1.5). * It is a weakness point* 0.10

0.00
b) The Covering assets rate in DOMINO'S domino's pizza macdonald's

PIZZA Company: Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

- in 2019 is 19 and it means that the ratio is less than the normal ratio
(1.0:1.5). *It is a strength point *
- in 2020 is 23 and it means that the ratio is less than the normal ratio
(1.0:1.5). *It is a strength point *
- in 2022 is 18 and it means that the ratio is less than the normal ratio
(1.0:1.5). *It is a strength point *

4. The analysis of financial structure ratio: The normal financial structure ratio
is 50% typically considered optimal or normal for well- established companies.

54
 1) The debt ratio:
a) The debt ratio: in MCD company :
- in 2019 is 117% and it means that the ratio is more than the normal ratio
(50%). * It is a weakness point*
- in 2020 is 115% and it means that the
debit ratio
ratio is more than the normal ratio 400%
(50%). * It is a weakness point* 350%

- in 2021 is 109% and it means that the 300%

ratio is more than the normal ratio 250%

(50%). * It is a weakness point* 200%

b) The debt ratio in DOMINO'S PIZZA 150%

company : 100%

50%

0%
- in 2019 is 347% and it means that the domino's pizza macdonald's

ratio is more than the normal ratio Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

(50%). * It is a weakness point*

- in 2020 is 311% and it means that the ratio is more than the normal ratio
(50%). * It is a weakness point*
- in 2021 is 352% and it means that the ratio is more than the normal ratio
(50%). * It is a weakness point*
2) The Equity ratio:
a) The Equity ratio in MCD company : equity ratio
- in 2019 is -17% and it means that the 0%
domino's pizza macdonald's
ratios less than the normal ratio (50%). *
-50%
It is a weakness point*
- in 2020 is -15% and it means that the -100%

ratio is less than the normal ratio (50%). -150%

* It is a weakness point* -200%

-250%

-300%

Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

54
 - in 2021 is -9 % and it means that the ratio is less than the normal ratio
(50%). * It is a weakness point*
b) The Equity ratio in DOMINO’S PIZZA Company:
- in 2019 is -247% and it means that the ratios less than the normal ratio
(50%). * It is a weakness point*
- in 2020 is -211% and it means that the ratio is less than the normal ratio
(50%). * It is a weakness point*
- in 2021 is -252 % and it means that the ratio is less than the normal ratio
(50%). * It is a weakness point*
5. The analysis of profitability ratio:
1) Profit per share (margin): we compared between the 3 years.
a) The profit per share in MCD company : profit per share
- 2019 6.584 dollar 9.000

- 2020 5.169 dollar 8.000

7.000

- 2021 8.244 dollar 6.000

b) The profit per share in DOMINO'S PIZZA

5.000

4.000

company : 3.000

2.000
- 2019 2.889 dollar 1.000

- 2020 2.357 dollar domino's pizza macdonald's

0.000

- 2021 2.129 dollar Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

2) Assets profitability: the good ratio is between 5%: 20% is considered great.
In general, the higher the ROA, the more efficient the company is at generating
profits.
a) The Assets profitability in MCD company :
- in 2019 is 13% and it means that the assets profitability
ratio is balanced with the normal ratio 40%
(5%: 20%). *It is a strength point * 35%

- in 2020 is 9% and it means that the 30%

ratio is balanced with the normal ratio 25%

(5%: 20%). *It is a strength point * 20%

- in 2021 is 14% and it means that the 15%

ratio is balanced with the normal ratio 10%

5%
(5%: 20%). *It is a strength point *
0%
domino's pizza macdonald's

54 Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

 b) The Assets profitability in DOMINO’S PIZZA Company:
- in 2019 is 36% and it means that the ratio is more than the normal ratio
(5%: 20%). *It is a strength point *
- in 2020 is 26% and it means that the ratio is more than the normal ratio
(5%: 20%). *It is a strength point *
- in 2021 is 22% and it means that the ratio is more than the normal ratio
(5%: 20%). *It is a strength point *
3) Equity profitability: the good ratio is between 10%: 14% is considered
great. In general, the higher the ROE, the more efficient the company is at
generating profits.
a) The Equity profitability in MCD company :
- in 2019 is -73% and it means that the
ratio is less than the normal ratio equity profitability
(10%:14%). * It is a weakness domino's pizza macdonald's
0%

point* -20%

-40%
- in 2020 is -60% and it means that the -60%
ratio is less than the normal ratio -80%

(10%:14%). * It is a weakness -100%

point* -120%

- in 2021 is -164 and it means that the -140%

-160%
ratio is more minority than the -180%
normal ratio (10%:14%). * It is a Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019
weakness point*.
b) The Equity profitability in DOMINO'S PIZZA company :
- in 2019 is -14% and it means that the ratio is less than the normal ratio
(10%:14%). * It is a weakness point*
- in 2020 is -12% and it means that the ratio is less than the normal ratio
(10%:14%). * It is a weakness point*
- in 2021 is -9 and it means that the ratio is less than the normal ratio
(10%:14%). * It is a weakness point*
4) Sales profit: As a rule of thumb, 5% is a low margin, 10% is a healthy
margin, and 20% is a high margin and the normal ratio is from 5%: 20%, the
more efficient the company is at generating profits.

54
 a) The Sales profit in MCD company :
- in 2019 is 28 % and it means that the ratio is more than the normal
ratio (5%:20%). *It is a strength point *
- in 2020 is 25% and it means that the ratio is more than the normal ratio
(5%:20%). *It is a strength point *
- in 2021 is 32% and it means that the sales profitability
ratio is more than the normal ratio 35%

(5%: 20%). *It is a strength point * 30%

b) The Sales profit in DOMINO'S 25%
PIZZA company : 20%
- in 2019 is 12 % and it means that 15%
the ratio is balanced with the normal 10%
ratio (5%:20%). *It is a strength 5%
point *
0%
- in 2020 is 11% and it means that the domino's pizza macdonald's

ratio is balanced with the normal Dec. 31, 2021 Dec. 31, 2020 Dec. 31, 2019

ratio (5%:20%). *It is a strength point *

- in 2021 is 11% and it means that the ratio is balanced with the normal
ratio (5%: 20%). *It is a strength point *

References
1. In the practical part we used these links:
McDonald’s:
 Balance-sheet:
 https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/
balance-sheet
 Income statement:

54
  https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/
income-statement

Domino’s pizza:
 Balance-sheet:
 https://www.macrotrends.net/stocks/charts/DPZ/dominos-pizza-
inc/balance-sheet
 Income statement:
 https://www.macrotrends.net/stocks/charts/DPZ/dominos-pizza-
inc/financial-statements

2. In the theoretical part :

 We concluded the previous links “statements”.
 Also, we used Dr/ Faith’s and professor Dr/ Darwish's book.

54