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McDonalds Financials Q1 2013

by June 24, 2013

Shrinking golden arches: despite continuing restaurant additions, and reimaging efforts, sales are weak, and weakness is expected to persist.

  • Despite 1,135 net traditional restaurants added in 2012, sales, margins and profits are slowly declining.
  • Management motivated the decline by “challenging eating-out environment”, “weaker performance in European Union”, “ongoing weakness in Japan and negative results in China”.
  • Actions to address the decline: ongoing restaurant reimaging, and technology initiatives. More than 1,600 restaurants worldwide are expected to be reimaged.
  • McDonalds expects to open 1,500 … 1,600 restaurants in 2013, yielding net additions of 1,200 … 1,300 traditional restaurants.
  • Whether efforts to increase sales will pay off, there remains to be seen.
  • For the time being, we see no effort to improve margins and operational efficiency, while continuous reimaging is dragging down the cash.

The charts below are self-explanatory. More details are available by clicking the links below charts or chart legends.

McDonalds Financials Q1 2013
Sales, earnings, balance sheet, cash flows


Income statement overview
Detailed revenues and expenses

  • McDonalds sales, costs, margins, and net income

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing how revenues are converted into earnings and profits:
    Sales, cost of sales, gross margin, operating expenses, operating margin, non-operating expenses, income taxes, exceptional items, preferred distributions, net income.

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  • McDonalds operating income

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing detailed revenues and costs chart, converging to earnings and net profits.

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We see here that business development efforts are so far ineffective.
McDonald’s efforts appear focused on the top line, and we see little evidence on concern on the bottom line, as net income tends to decrease.
Operational expenses tend to increase.
Even more, McDonald’s projects that selling, general and administrative expenses for FY 2013 will increase about 2-3%.


Balance sheet
Current assets
Long-term assets
Current liabilities
Long-term liab.

  • McDonalds balance sheet overview: assets and liabilities

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing the overall financial strength of the company in the form of a balance sheet chart:
    Current assets, long term assets, current liabilities, long-term liabilities, equity, are all plotted here as an overview chart.

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  • McDonalds current assets details

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing the details on the most liquid (current) assets:
    cash, investments, accounts receivable, inventory, deferred tax, others.

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  • McDonalds property, equity, intangibles

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing non-current (capital) assets details:
    Property plant and equipment, equity, goodwill, intangibles, others.

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  • McDonalds accounts payable, debt, taxes due

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing current liabilities in full details:
    Payables, debt, taxes, others.

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  • McDonalds debt, pensions, and other long term liabilities

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing long term liabilities in full detail:
    Bebt, taxes, and others.

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Balance sheet details show a drag on cash, as cash is used to increase the asset base.
The lack of traction is sales however is worrying.


Cash flow overview
Operating cash flow
Investment cash flow
Financing cash flow

  • McDonalds cash flow overview: operational, financial, investment

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing the overview of cash flows:
    Net cash flow, as dividend in operating, financing, and investment cash flow.

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  • McDonalds current assets details

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing operating cash flows (cash flow generated by operating activities):
    Net income, adjustments, accounts payable, accounts receivable, inventory.

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  • McDonalds property, equity, intangibles

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing financing cash flows (cash flow from financing activities):
    Debt, stock, dividend.

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  • McDonalds accounts payable, debt, taxes due

    McDonalds financials for Q1 2013
    Here you see a nicely-colored chart showing the investment cash flows (cash flow from investing activities):
    Property plant and equipment, investments, securities, in full detail.

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Overall cash flow is declining.
Dividends are stable, and dividend payments use a large part of the operational cash flow.
If lack-luster performance will continue, we see little chance of dividend raises over the next quarters.

Data sources for McDonalds financials for Q1 2013:
All charts are interactive.
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