Case Report Analysis

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Case Report Analysis III. Capabilities Analysis McDonalds is a firm that has demonstrated potential over many decades on how it has the potential to succeed in the market. A. Financial Trends 1.Sales McDonald has continued to demonstrated fluctuations in the sales revenues. However, the overall sales growth has been declining over the past five years which is attributed to various factors in the market. Year 2011 2012 2013 2014 2015 Sales in Billion 27.01B 27.57B 28.11B 27.44B 25.41B Sales growth - 2.08% 1.95% -2.36% -7.39% Some of the factors that have contributed the decline in sales at McDonalds is the increase in competition from other food outlets. Other factors that might have contributed to the decline in the sales revenues is the changing culture in people who do not want to concentrate in the uptake of fast foods. Geopolitical issues also appear to have contributed to a decline in the sales revenues in other regions (Grant, 2016). 2.Operating margin The operating margin of the McDonald’s has also been fluctuating over the years. Operating margin is calculated by dividing operating income by revenues. Based on the data presented, operating margin of the McDonald’s has been deteriorating. The deterioration is observable from 2013 to 2014. Additionally, the operating margin has also deteriorated from 2014 to 2015. Years 2011 2012 2013 2014 2015 Operating margin 31.6% 31.2% 31.2% 29.0% 28.1% 3.ROI Return on Investment is profitability ratio calculated by dividing net income by the total assets invested. Similarly, the McDonald’s has continued to experience deterioration from the year 2013 to 2015. Years 2011 2012 2013 2014 2015 Return on Investment 16.68%

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