The goal of this assignment is to expand your understanding of the uses of financial statement

The goal of this assignment is to expand your understanding of the uses of financial statement information. This project is based on the information provided in Ch. 4. We will examine the financial performance of McDonald’s and one of its competitors. You will need to select a competitor.Obtain financial statements and market data (current stock price, number of shares outstanding) for the two companies from its Hoover’s dataset (easy and available through the library website), company’s website, finance.yahoo.com, money.msn.com, SEC.gov, or Edgar (also easy and available through the library website).Calculate following ratios and measures for McDonald’s and the company you selected and compare them to the industry ratios. McDonald’s is usually classified as a quick service restaurant, but depending on the competitor you pick, you may be able to justify another industry classification. Here are the ratios that you will need to calculate:Performance measures:Market value added (MVA)Market-to-book ratioEconomic value added and profitability measures:EVAReturn on capital (ROC)Return on assets (ROA)Return on equity (ROE)Measuring efficiency—asset management or turnover measures:Assets turnoverFixed assets turnoverInventory turnoverAverage days in inventoryReceivables turnoverAverage collection periodAnalyzing the return on assetsProfit marginOperating profit marginThe DuPont systemMeasuring financial leverage—long-term solvency measuresLong-term debt ratioLong-term debt–equity ratioTotal debt ratioTimes interest earnedCash coverage ratioMeasuring liquidity—short-term solvency or liquidity measuresNWC to total assets ratioCurrent ratioQuick ratioCash ratioGrowth measures:Payout ratioSustainable growthFor each ratio, comment on how it would be viewed relative to the competitor or industry. You cannot just say that a ratio is higher than average or lower than average; you must explain WHAT the ratio means and WHY the value would be viewed either positively or negatively.For example, suppose you calculate the inventory turnover ratio. How would you interpret the ratio? How dos your company compare to the industry averages for this ratio? Is it better to have higher or lower inventory turnover in this industry or does it not matter so much?You will need to find cost of capital for the McDonald’s industry to calculate EVA. This is the link to the dataset with different industries’ costs of capital (WACC):http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htmDeliverables:Provide submit a report in Excel on Moodle with financial statements and all formulas in a following format:Performance Measure or RatioMcDonald’sCompetitorIndustry Average CommentPerformance Measures:MVAMarket-to-Book RatioEconomic Value Added and Profitability Measures:

Order your essay today and save 30% with the discount code: KIWI20