At the 2002 Annual Shareholder's meeting, there were 1,271,963,721 shares outstanding(McDonald's, 2002). McDonald's is included in many indices including the Dow Jones Industrial Average, the S&P 500 and the S&P Globally Traded Stock Index (McDonald's, 2002). Although the economies of many countries are suffering, McDonald's offers a great long-term investment opportunity for the prosperous investor. In 2001, McDonald's reports an extensive amount of effort to restructuring the organization and redistributing resources to increase shareholder and company wealth. McDonald's owes their consistent profitability to the many franchises around the world and returns exceed their cost of capital. .
McDonald's is planning to expand their reach in the business world and add 1,300 to 1,400 new McDonald's restaurants in 2002 (McDonald's, 2002). They are also planning to open 100 to 150 new Partner Brands' restaurants in 2002. McDonald's further plans to enhance profitability by reducing costs, expanding menu, improving customer service, generating new types of restaurant such as McCafés and leveraging their supply infrastructure to achieve greater economies of scale.
McDonald's financial ratios further illustrate their outstanding financial position in today's business world. Most of McDonald's results exceed industry standards. By analyzing the profitability ratios, we are able to see that McDonald's shows a higher return on the sales dollar (11.01%) than the industry average of 6.7%. However, the return on assets (7.3%) is lower than the industry norm (10%). This is primarily due to the large amount of total assets. McDonald's satisfactory return on assets is due to the company's high profit margin (11.01%). McDonald's return on equity (17.2%) is due to their generous utilization of debt, total assets and generous payment to shareholders. McDonald's persistently stresses their commitment to their shareholders.