Financial Analysis Final Acc 280

In: Business and Management

Submitted By Mygirls3
Words 3060
Pages 13
Financial Analysis
XACC/280
University of Phoenix

Financial Analysis
The financial health of an organization is an essential piece of information used by investors to assess how well the organization is performing and to make informed decisions about whether to purchase stock or remain invested. The annual report of a publicly traded company is available for anyone to review; it discloses the financial health of the company to potential or current investors. Investors use the annual report to determine what the company plans to do in the future, as well as compare the financial information from the previous year(s). Annual reports show if the company's sales, assets, and liabilities have increased, decreased, or stayed the same. The following is an analysis of McDonald’s Corporation 2010 Annual Financial Report, and will compare the financial health of the company, explain why it is worth investing, and provide analyses to support the investment decision.
McDonald’s was ranked 111 on Fortune 500’s annual ranking of America’s largest corporations in 2010 (Fortune 500, 2011). The restaurant is one of the largest fast-food chains in the world and experienced many financial highs in 2010. Revenues increased 6% and the guest count rose by 4.9%, in addition to the Company returning $5.1 billion to shareholders (McDonald’s Corporation, 2011, p.11). These are just glimpses of what the organization accomplished over the course of a year. In order to provide more information on McDonald’s financial health analyses were performed and the results were evaluated. There are several tools used to analyze financial statements: vertical analysis, horizontal analysis, and ratio analysis. These analyses help evaluate an organization’s profitability, solvency, and liquidity (Weygandt, Kimmel, & Kieso, 2008). According to Businessdictionary.com (2012), a vertical analysis…...

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