Example research essay topic: Ray Kroc Ronald Mcdonald - 2,341 words

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I would like to start by saying that in 1937 the McDonald brothers opened a first drive in hamburger place in San Bernandino. The place became rather popular among the teenage boys who would drive around on the cars and flirt with the girls. The service was slow. In the fall of 1948, the McDonalds closed for remodeling and when it opened, it already possessed the assembly line and would appeal to children by giving away items and special promotions. In 1954, Mr.

Ray Kroc was the first McDonalds franchisee in San Bernandino, California. The next year Ray Kroc would open the first McDonalds restaurant in Chicago IL and thus created the McDonalds corporation. Ray Kroc was the one to develop the QSC&V (quality, service, cleanliness and value) concept to become the corporate motto. By the start of 1960, McDonalds had over 100 restaurants in Chicago alone. In 1961, Ray Kroc becomes the sole owner of McDonalds company by buying all the rights from the McDonalds brothers for just less than $ 3 million. The same year he opens the McDonalds Hamburger University in Elk Grove, in the Chicago outskirts.

By 1963, McDonalds sold over 1 billion hamburgers, had 500 McDonalds restaurants open and have celebrated the graduation of 500 students from the McDonalds university. The same year McDonalds would create the clown Ronald McDonald. The same year the McDonalds net income reached $ 1, 000, 000. In 1964, McDonalds created the Fishmac or the so called Filet-o-fish and went public. EPS was from 10 to 22, while the McDonalds stock price ranged from 16 to 33 dollars per share. In 1966 McDonalds became a part of the NYSE.

In 1967, McDonalds would enter Canada and Puerto rico and also introduced the Big Mac. The state of Illinois boasts having over 1000 McDonalds restaurants. By 1970, McDonalds was in every US state as well as in Costa Rica and the British Virgin Islands. In 1971, McDonalds would enter Japan, Holland, Australia, German, Panama, Guam while the McDonald's Japanese President, Den Fujita, stated "the reason Japanese people are so short and have yellow skins is because they have eaten nothing but fish and rice for two thousand years"; "if we eat McDonald's hamburgers and potatoes for a thousand years we will become taller, our skin become white and our hair blonde." By 1972, McDonalds sales were over $ 1 billion and has a new McDonalds restaurant open each day. The same year McDonalds enters france and El Salvador. The state of Illinois boasts having 2000 McDonalds restaurants.

McDonalds created the quarter pounder. The same year McDonalds would grant Richard Nixon $ 250, 000 while hinting that it is very undesirable for the minimum wage to raise. Furthermore, McDonalds lobbied the legislation to allow McDonalds to pay less than the minimum wage to young workers. In 1973, McDonalds would open a company in the UK as well as enter Sweden with its new product Egg Mc Muffin. The same year McDonalds decided to target children, not adults with its commercials. McDonalds enters Netherlands, Antilles, Guatemala.

The company starts to use lie detectors when hiring its employees to know exactly what they think about unions. In 1975, McDonalds opens the first drive-thru as well as entered hong kong, Bahamas, Nicaragua. In 1976, McDonalds has already over 4000 McDonalds restaurants in Canada as well as entered Switzerland, and New Zealand. This year McDonalds creates the largest restaurant that hosts 334 seats. Then, McDonalds would enter Ireland and Austria and would open its 5000 th restaurant in Japan. In 1978, McDonalds created Sundae and entered Belgium, Brazil, and Singapore.

In 1980, McDonalds opened its 6000 th restaurant in Germany and entered Spain, Denmark and Malaysia. In 1982, Geoffrey Guiliano, a main Ronald McDonald actor, quit and publicly apologised, stating "I brainwashed youngsters into doing wrong. I want to say sorry to children everywhere for selling out to concerns who make millions by murdering animals." The same year McDonalds was responsible for the e. coli poisoning outbreak. In 1983 McDonalds secretly imports beef to UK from Brazil, something that officially McDonalds said it would never do.

The same year McDonalds created chicken Mc Nuggets and entered Norway. In 1985, McDonalds sold over 50 billion Hamburgers and serves over 18 million customers a day. If one was to line up all the McDonalds hamburgers sold since the compass creation, the line would circle the earth 104 times and would reach to the moon and back 6 times. In 1987, McDonalds has presence in 48 countries and serves 20 million people a day in over 10, 000 McDonalds restaurants. In 1995, McDonalds opened in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad, India, and United Arab Emirates, bringing the total to over 15, 000 in 79 countries on 6 continents. Now lets refer to the McDonalds financial ratios for the years 2003 and 2002.

Ratios and Date Dec 31, 2003 Dec 31, 2002 Profit Margin = Net Income/Net sales 0, 085843 0, 057998 ROA = Net Income/Average Assets 0, 061283 0, 03931 ROE = Net Income/Average Stockholders equity 0, 139025 0, 092515 Inventory turnover = COGS/average inventory 63, 91316 62, 72701 Fixed asset turnover = Net Sales /Average fixed Assets 0, 771979 0, 733705 Total asset turnover = Net Sales /Average Assets 0, 713889 0, 677784 Current ratio = Current assets / current liabilities 0, 758468 0, 70817 Quick ratio = (Cash+Msec+A/R net) /Current liabilities 0, 706412 0, 662057 Debt to total assets = total debt / total assets 0, 405781 0, 446687 As we can see the profitability ratios as represented by Profit Margin, Return on Assets, Return on Equity were gradually growing from the period 2002 - 2003. McDonalds inventory turnover also increased meaning that the company is becoming more liquid in 2003 than a year earlier. One could also see the increase in the fixed and total assets turnover. The liquidity as seen by the current and quick ratios also show significant improvement of McDonalds financial position. The Break even point equals to fixed costs/ (Profit per one product-Variable cost per one product) and the result will be the number of new hamburgers or sundae that McDonalds needs to produce to meet the minimal requirements. Thus if it costs on average $ 2, 000, 000 to start up some new product line (say Mc Salmon) and the labor, packaging etc (variable costs) associated with the sale of our Mc SAlmon add up to $ 2 /per menu and McDonalds sells its menu for $ 4. 99, than in order to find out the Break Even Point we need to makes some simple calculations: BEP = $ 2, 000, 000 / (4. 99 - 2. 00) = 668, 897 hamburgers Mc Salmon.

Taking into account the fact that McDonalds serves over 20 million customers a day selling the amount of Mc Salmon that is only a fraction of? million to meet the BEP, is truly feasible. Please remember that any Mc Salmon sold after the initial 668, 897, creates profit. McDonalds usually uses the straight line method of depreciation, yet where permitted (McDonalds operated in over 100 countries now) it certainly would use accelerated method, which proves to be more profitable for the company. Bibliography: web web Addendum: Annual Income Statement (Values in Millions) Dec 31, 2003 Dec 31, 2002 Dec 31, 2001 Dec 31, 2000 Dec 31, 1999 Sales 17140, 5 15405, 7 14870 14243 13259, 3 Cost of Sales 7384, 1 6617, 7 6323, 8 5821, 5 5192, 7 Gross Operating Profit 9756, 4 8788 8546, 2 8421, 5 8066, 6 Selling General & Admin, Expense 5776 4791 4562, 9 4277, 5 3895, 9 Other Taxes 0 0 0 0 0 EBITDA 3980, 4 3997 3983, 3 4144 4170, 7 Depreciation & Amortization 1148, 2 1050, 8 1086, 3 1010, 7 956, 3 EBIT 2832, 2 2946, 2 2897 3133, 3 3214, 4 Other Income Net - 97, 8 - 910 - 52 178, 9 84, 9 Total Income Avail for Interest Exp, 2734, 4 2036, 2 2782, 1 3312, 2 3280, 4 Interest Expense 388 374, 1 452, 4 429, 9 396, 3 Minority Interest 0 0 0 0 0 Pre-tax Income 2346, 4 1662, 1 2329, 7 2882, 3 2884, 1 Income Taxes 838, 2 670 693, 1 905 936, 2 Special Income/Charges 0 0 - 62, 9 0 - 18, 9 Net Income from Cont, Operations 1508, 2 992, 1 1636, 6 1977, 3 1947, 9 Net Income from Discount, Opers, 0 0 0 0 0 Net Income from Total Operations 1508, 2 992, 1 1636, 6 1977, 3 1947, 9 Normalized Income 1508, 2 992, 1 1699, 5 1977, 3 1966, 8 Extraordinary Income 0 0 0 0 0 Income from Cum, Eff, of Acct, Chg, - 36, 8 - 98, 6 0 0 0 Income from Tax Loss Carry forward 0 0 0 0 0 Other Gains (Losses) 0 0 0 0 0 Total Net Income 1471, 4 893, 5 1636, 6 1977, 3 1947, 9 Dividends Paid per Share 0, 4 0, 24 0, 23 0, 22 0, 2 Preferred Dividends 0 0 0 0 0 Basic EPS from Cont, Operations 01, 01, 2019 0, 78 01, 01, 2027 01, 01, 1949 01, 01, 1944 Basic EPS from Discount, Operations 0 0 0 0 0 Basic EPS from Total Operations 01, 01, 2019 0, 78 01, 01, 2027 01, 01, 1949 01, 01, 1944 Diluted EPS from Cont, Operations 01, 01, 2018 0, 77 01, 01, 2025 01, 01, 1946 01, 01, 1939 Diluted EPS from Discount, Operations 0 0 0 0 0 Diluted EPS from Total Operations 01, 01, 2018 0, 77 01, 01, 2025 01, 01, 1946 01, 01, 1939 Annual Balance Sheet (Values in Millions) 01, 12, 2003 01, 12, 2002 01, 12, 2001 01, 12, 2000 01, 12, 1999 Assets Current Assets Cash and Equivalents 492, 8 330, 4 418, 1 421, 7 419, 5 Receivables 734, 5 855, 3 881, 9 796, 5 708, 1 Inventories 129, 4 111, 7 105, 5 99, 3 82, 7 Other Current Assets 528, 7 418 413, 8 344, 9 362 Total Current Assets 1885, 4 1715, 4 1819, 3 1662, 4 1572, 3 Non-Current Assets Property Plant & Equipment Gross 28740, 2 26218, 6 24106 23569 22486, 8 Accum, Depreciation & Depletion 8815, 5 7635, 2 6816, 5 6521, 4 6162, 3 Property Plant & Equipment Net 19924, 7 18583, 4 17289, 5 17047, 6 16324, 5 Intangibles 1665, 1 1559, 8 1419, 8 1443, 4 1261, 8 Other Non-Current Assets 2049, 9 2111, 9 2005, 9 1530, 1 1824, 6 Total Non-Current Assets 23639, 7 22255, 1 20715, 2 20021, 1 19410, 9 Total Assets 25525, 1 23970, 5 22534, 5 21683, 5 20983, 2 Liabilities & Shareholder's Equity Current Liabilities Accounts Payable 577, 4 635, 8 689, 5 684, 9 585, 7 Short Term Debt 388 275, 8 362, 5 630 1619, 9 Other Current Liabilities 1520, 4 1510, 7 1196, 3 1046 1068, 7 Total Current Liabilities 2485, 8 2422, 3 2248, 3 2360, 9 3274, 3 Non-Current liabilities Long Term Debt 9342, 5 9703, 6 8555, 5 7843, 9 5632, 4 Deferred Income Taxes 1015, 1 1003, 7 1112, 2 1084, 9 1173, 6 Other Non-Current Liabilities 699, 8 560 1130, 1 1189, 4 1263, 8 Minority Interest 0 0 0 0 0 Total Non-Current Liabilities 11057, 4 11267, 3 10797, 8 10118, 2 8069, 8 Total Liabilities 13543, 2 13689, 6 13046, 1 12479, 1 11344, 1 Shareholder's Equity Preferred Stock Equity 0 0 0 0 0 Common Stock Equity 11981, 9 10280, 9 9488, 4 9204, 4 9639, 1 Total Equity 11981, 9 10280, 9 9488, 4 9204, 4 9639, 1 Total Liabilities & Stock Equity 25525, 1 23970, 5 22534, 5 21683, 5 20983, 2 Total Common Shares Outstanding 1, 3 Bil 1, 3 Bil 1, 3 Bil 1, 3 Bil 1, 4 Bil Preferred Shares 0 0 0 0 0 Treasury Shares 398, 7 Mil 392, 4 Mil 379, 9 Mil 355, 7 Mil 309, 8 Mil

Research essay sample on Ray Kroc Ronald Mcdonald