Most current financial data and ratios for two firms in a single Research Paper

Most current financial data and ratios for two firms in a single industry, from the US - Research Paper Example Financial analysis between McDonalds and Yum Brands Incl. to determine their competitiveness since the figures in financial statements never lies. Analysis will be done on the cash flow, income statement and balance statement These ratios include current ratio, quick ratio and cash ratio. This ratio shows the extent at which the company is able to repay its short term liabilities using current liabilities. According to (Ross & Westerfield, 2000) a value of 1 or greater shows the firm is more liquid hence able to repay its short term obligations with ease. From the above analysis we can see that McDonalds has higher liquidity ratio than Yum Brands Incl. thus it has $ 1.59 to pay $ 1 debt while Yum Brands Incl. only has $0.75 to settle $1 thus having a deficit of $ 0.25. From the above analysis still McDonalds has higher quick ratio as compared to Yum Brands Incl. which has 0.39. This proofs that McDonalds is able to pay off its debt with ease as compared to Yum Brands Incl. This analysis measures the level of profit making a company is as compared to other competitors (Rowland, 1936). These ratios are one of those that attract investors to invest in a given firm. Some of the ratios are as follows; From the above analysis McDonalds is able to $ 0.22 for every $ 1 invested in the company as opposed to Yum Brands Incl. which only gains $ 0.18. This shows that McDonalds receives great return from usage of its assets. This ratio shows the proportion of the company’s equity financed by owner’s equity and debt. This ratio is supposed to be as low as possible because high level reflects the company is at a state of insolvency (Kieso & Weygandt, 2001). From the above analysis both firms its assets are financed more by debt by owner’s equity. For McDonalds its assets are financed 1.28 times than by owner’s equity as for Yum Brand Incl. it is terrible since it is asset is financed more than