McDonald's (XSGO:MCD) ROCE % : 25.86% (As of Sep. 2024)

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What is McDonald's ROCE %?

ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. McDonald's's annualized ROCE % for the quarter that ended in Sep. 2024 was 25.86%.

McDonald's ROCE % Historical Data

The historical data trend for McDonald's's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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McDonald's ROCE % Chart

McDonald's Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

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24.79

16.29

21.42

18.73

24.78

McDonald's Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROCE %	Get a 7-Day Free Trial															27.54	23.62	22.72	23.78	25.86

McDonald's ROCE % Calculation

McDonald's's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	11883	/	( ( (50435.6 - 3802.1)	+	(56146.8 - 6859) )	/ 2 )
	=	11883	/	( (46633.5	+	49287.8)	/ 2 )
	=	11883	/	47960.65
	=	24.78 %

McDonald's's ROCE % of for the quarter that ended in Sep. 2024 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Sep. 2024 )		(Q: Jun. 2024 )		(Q: Sep. 2024 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Sep. 2024 )		(Q: Jun. 2024 )		(Q: Sep. 2024 )
	=	12896	/	( ( (53801 - 3910)	+	(56172 - 6308) )	/ 2 )
	=	12896	/	( ( 49891	+	49864 )	/ 2 )
	=	12896	/	49877.5
	=	25.86 %

(1) Note: The EBIT data used here is four times the quarterly (Sep. 2024) EBIT data.

McDonald's (XSGO:MCD) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

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McDonald's Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » McDonald's Corp (XSGO:MCD) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

MCD:USA MCD:Mexico 1MCD:Italy MDOd:UK MDO0:Germany MDO:Germany MDO:Germany MDO:Germany MDO:Germany MCDS:Canada MCDC34:Brazil MCD:Austria MCD:Argentina

Address

110 North Carpenter Street, Chicago, IL, USA, 60607

Website

https://www.investor.mcdonalds.com

McDonald's is the largest restaurant owner-operator in the world, with 2023 system sales of $130 billion across nearly than 42,000 stores and 115 markets. McDonald's pioneered the franchise model, building its footprint through partnerships with independent restaurant franchisees and master franchise partners around the globe. The firm earns roughly 60% of its revenue from franchise royalty fees and lease payments, with most of the remainder coming from company-operated stores across its three core segments: the United States, internationally operated markets, and international developmental/licensed markets.