60.1K

Verified Solution

Link Copied!

Liquidity Analyses for McDonald's and Wendy's The following information was summarized from the balance sheets included in Form 10-K of McDonald's Corporation at December 31, 2015, and The Wendy's Company and Subsidiaries at January 3, 2016. McDonald's Wendy's (in millions) (in thousands) Current Assets Cash and cash equivalents $2,116 $ 253,912 Accounts and notes receivable 1,240 69,690 Inventories 113 8,416 Prepaid expenses and other current assets 784 70,648 Advertising funds restricted assets 62,046 Total current assets $ 4,253 $ 464,712 Total current liabilities $ 2,811 $ 349,422 Total noncurrent liabilities $17,912 $2,012,139 Total Shareholders' equity $12,423 $1,643,759 *Described as "Cash and equivalents" by McDonald's **Described as "Stockholders' equity" by Wendy's Required: 1. Using the information provided, compute the following for each company at year-end: a. Working capital. Enter amounts for McDonalds in millions, Wendy's in thousands b. Current ratio. Round your answers to two decimal places. c. Quick ratio. Round your answers to two decimal places. $ 2,116 $ 253,912 69,690 1,240 Current Assets: Cash and cash equivalents* Accounts and notes receivable Inventories Prepaid expenses and other current assets Advertising funds restricted assets 113 8,416 70,648 784 62,046 Total current assets Total current liabilities Total noncurrent liabilities $ 4,253 $ 2,811 $17,912 $12,423 $ 464,712 $ 349,422 $2,012,139 $1,643,759 Total shareholders' equity** *Described as "Cash and equivalents" by McDonald's. **Described as "Stockholders' equity" by Wendy's. Required: 1. Using the information provided, compute the following for each company at year-end: a. Working capital. Enter amounts for McDonalds in millions, Wendy's in thousands. b. Current ratio. Round your answers to two decimal places. c. Quick ratio. Round your answers to two decimal places. McDonald's Wendy's a. Working capital b. Current ratio C. Quick ratio 2. Which company appears to be more liquid? McDonald's

Answer & Explanation Solved by verified expert

See Answer