With the economy in a slump of the recession, McDonald's is doing very well. In fact, their stock is up 1% from last year because of an increase in sales. With customers holding tight on to their money, they're spending it on a McDonalds meal simply because it is cheap and quite good for its price. McDonalds also started selling "McCafes" which was a cheaper alternative than buying from Starbucks. In order to insure that many customers will return to McDonalds, they have done simple things such as allowing customers to use their credit cards. Also, many locations are open 24/7 and the drive-through is most convenient for people on the go any time of the day. The convenience factor that McDonalds has is mainly why it is doing much better than its other competitors such as Burger King and Wendys.
http://www.financialpost.com/news-sectors/story.html?id=1336727
In regards to the relation of Chapter 15, the insiders of a company are able to produce financial statements anytime of the year to evaluate the company’s performance. As the economy is in the recession, many executives, owners, and management groups of McDonalds are analyzing the financial statements very thoroughly and seeing if there are any favorable or unfavorable trends in its statements. As stated in the article, McDonalds has seen an increase in its sales and it wouldn’t have been possibly noted if it wasn’t for the Comparative Income Statement. Because it is so easy for the executives to get financial statements on a daily basis, they’re able to encourage its strengths which is what McDonalds has done. They have lowered prices and added the convenience factor to which appeals very much to its customers. For McDonalds to see how well they’re against their competitors, they would use the Common-Size Income Statement and Common-Size Balance Sheet for a side by side comparison. The figures would be changed into percentages for a much more meaningful analysis.
I think McDonalds has dealt with the recession very well by lowering their prices on food and adding some variety to their selection. As people are tight with money, it is most often that they will want to find a place to eat that is fairly cheap and most bang for their buck. They would most likely think of McDonalds because it has built up its name around the 2 qualities. Once again, their convenience factor plays a big role mainly because people might be in between 2 jobs, and the drive-through is very quick. As well, McDonalds usually sends out coupons such as “Buy one, get one free” or “2 can dine for $7.98” which takes in more customers and results in higher sale figures.
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Wow. With the recession, I didn't think any company would be able to improve on their stocks. Your article totally surprised me. As a growing chain of fast food restaurant, I guess it would make sense that the stocks of McDonalds are increasing. Built on their name and their cheap affordable food, McDonalds is globally-recognized. Even though a majority of the workers at McDonalds are young teenagers, it seems as though the guys up in management know exactly what they're doing. I agree that they must be analyzing the Comparative Income Statement. With that, not only will they be able to easily tell what’s working for the company, they can also figure out what isn’t. But one thing that has me wondering, if there are McDonald franchises all over the world, how do they determine their stocks? But it makes sense, since the recession affecting the whole world, some McDonalds here may not be doing so well, but in another country they may be thriving. That would counter-balance and result in the 1% increase on McDonalds’ stocks.
K. Li
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