The following summary information is taken from the annual reports of McDonald’s Corporation and Wendy’s International. All amounts are in millions.
|
McDonald’s |
Wendy’s |
|||
|
2001 |
2000 |
2001 |
2000 |
|
|
Sales revenue |
$14,870 |
$14,243 |
$2,391 |
$2,237 |
|
Operating income |
2,697 |
3,330 |
307 |
271 |
|
Net income |
1,637 |
1,977 |
194 |
170 |
|
Total assets |
22,535 |
21,684 |
2,076 |
1,958 |
|
Stockholders’ equity |
9,488 |
9,204 |
1,030 |
1,126 |
a. Compute profit margin, asset turnover, return on assets, financial leverage, and return
on equity for both firms for both years.
b. Which company is more profitable? What similarities or differences do you observe in how these two companies earned their profits during the periods shown?