NYSE · Consumer Cyclical

McDonald's Corporation

MCD · Restaurants

$276.52

▼ -1.52 (-0.55%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

N/A⤢

Fin. Health

D⤢

Years to Pay Off Debt 23.1 yrs

Working Capital vs Long-Term Debt -$39.5B

Working Capital $327M

Valuation

D⤢

Price-to-Book N/A (neg. equity)

Cash Flow

B⤢

Free Cash Flow $2.0B

CapEx % of Net Income 35.2%

Owner Earnings $3.8B

Financial Health

Years to Pay Off Debt 23.1 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$39.5B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $327M

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $2.0B

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 35.2%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $3.8B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About McDonald's Corporation

McDonald's Corporation owns, operates, and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, frozen desserts, sundaes, soft serve cones, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates franchised restaurants under various structures, including conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.

Metric Explanations

What each dimension measures and where the thresholds come from.

Market Data

Market Cap $195.2B

Enterprise Value $249.5B

P/E (TTM) 21.88

Dividend Yield 2.68%

Exchange NYSE

Key Margins

Gross Profit N/A

Operating Margin N/A

Net Margin N/A

Company Info

Sector Consumer Cyclical

Industry Restaurants

Employees 150000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering McDonald's Corporation at $276.52.

The business passes only 1 of 5 of Graham's defensive criteria — well below his required standard.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q3 2026	Q4 2025
Gross Profit %	N/A•	57.5%
Operating Margin %	N/A•	45.0%
Net Income %	N/A•	30.9%
Diluted EPS	3.51▲	3.03

Balance Sheet Highlights

Metric	Q2 2026	Q4 2025
Total Assets	$59.9B	$59.5B
Total Debt	$54.6B▼	$54.8B
Working Capital	$327M▲	-$198M
Years to Pay Debt	23.11	25.33

Cash Flow Highlights

Metric	Q2 2026	Q4 2025
Free Cash Flow	$2.0B▲	$1.6B
Owner Earnings	$3.8B	$3.8B
CapEx % of Net Income	35.2%	48.9%

Income Statement

	2026	2025
Tax Effect Of Unusual Items		-6,248
Tax Rate For Calcs		0
Normalized EBITDA		3,772,000
Total Unusual Items		-29,000
Total Unusual Items Excluding Goodwill		-29,000
Net Income From Continuing Operation Net Minority Interest		2,164,000
Reconciled Depreciation		576,000
Reconciled Cost Of Revenue		2,526,000
EBITDA		3,743,000
EBIT		3,167,000
Net Interest Income		-391,000
Interest Expense		410,000
Interest Income		19,000
Normalized Income		2,186,752
Net Income From Continuing And Discontinued Operation		2,164,000
Total Expenses		3,851,000
Rent Expense Supplemental		3,036,000
Total Operating Income As Reported		3,156,000
Diluted Average Shares	708,300	714,200
Basic Average Shares	707,642	710,600
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders		2,164,000
Net Income Common Stockholders		2,164,000
Net Income		2,164,000
Net Income Including Noncontrolling Interests		2,163,000
Net Income Continuous Operations		2,163,000
Tax Provision		594,000
Pretax Income		2,757,000
Other Income Expense		-11,000
Other Non Operating Income Expenses		8,000
Special Income Charges		-14,000
Gain On Sale Of Ppe		-16,000
Gain On Sale Of Business		83,000
Write Off		81,000
Earnings From Equity Interest		10,000
Gain On Sale Of Security		-15,000
Net Non Operating Interest Income Expense		-391,000
Interest Expense Non Operating		410,000
Interest Income Non Operating		19,000
Operating Income		3,157,000
Operating Expense		873,000
Depreciation Amortization Depletion Income Statement		124,000
Depreciation And Amortization In Income Statement		124,000
Selling General And Administration		749,000
Gross Profit		4,030,000
Cost Of Revenue		2,978,000
Total Revenue		7,008,000
Operating Revenue		6,846,000

Balance Sheet

	2026	2025
Treasury Shares Number		950,000
Ordinary Shares Number	707,642	710,600
Share Issued	707,642	1,660,600
Net Debt	39,041,000	39,199,000
Total Debt	54,592,000	54,814,000
Tangible Book Value	-4,369,000	-5,144,000
Invested Capital	38,841,000	38,183,000
Working Capital	327,000	-198,000
Net Tangible Assets	-4,369,000	-5,144,000
Capital Lease Obligations	14,729,000	14,841,000
Common Stock Equity	-1,022,000	-1,790,000
Total Capitalization	38,841,000	38,183,000
Total Equity Gross Minority Interest	-1,023,000	-1,791,000
Stockholders Equity	-1,022,000	-1,790,000
Gains Losses Not Affecting Retained Earnings	-2,340,000	-2,414,000
Other Equity Adjustments	-2,340,000	-2,414,000
Treasury Stock	80,527,000	79,316,000
Retained Earnings	71,987,000	70,282,000
Additional Paid In Capital	9,841,000	9,641,000
Capital Stock	17,000	17,000
Common Stock	17,000	17,000
Total Liabilities Net Minority Interest	60,943,000	61,306,000
Total Non Current Liabilities Net Minority Interest	56,925,000	56,945,000
Other Non Current Liabilities	679,000	703,000
Tradeand Other Payables Non Current	176,000	139,000
Non Current Deferred Liabilities	2,168,000	1,983,000
Non Current Deferred Revenue	946,000	945,000
Non Current Deferred Taxes Liabilities	1,222,000	1,038,000
Long Term Debt And Capital Lease Obligation	53,902,000	54,120,000
Long Term Capital Lease Obligation	14,039,000	14,147,000
Long Term Debt	39,863,000	39,973,000
Current Liabilities	4,018,000	4,361,000
Other Current Liabilities
Current Debt And Capital Lease Obligation	690,000	694,000
Current Capital Lease Obligation	690,000	694,000
Current Debt
Other Current Borrowings
Payables And Accrued Expenses	3,328,000	3,667,000
Current Accrued Expenses	1,626,000	2,021,000
Interest Payable	428,000	533,000
Payables	1,702,000	1,646,000
Total Tax Payable	588,000	497,000
Income Tax Payable	327,000	250,000
Accounts Payable	1,114,000	1,149,000
Total Assets	59,920,000	59,515,000
Total Non Current Assets	55,574,000	55,352,000
Other Non Current Assets	6,393,000	6,331,000
Investments And Advances	2,896,000	2,820,000
Long Term Equity Investment	2,896,000	2,820,000
Goodwill And Other Intangible Assets	3,347,000	3,354,000
Goodwill	3,347,000	3,354,000
Net PPE	42,938,000	42,847,000
Accumulated Depreciation	-21,464,000	-21,049,000
Gross PPE	64,402,000	63,896,000
Other Properties	64,402,000	18,019,000
Buildings And Improvements		37,708,000
Land And Improvements		8,169,000
Current Assets	4,345,000	4,163,000
Other Current Assets	980,000	862,000
Inventory	58,000	61,000
Receivables	2,485,000	2,466,000
Accounts Receivable	2,485,000	2,466,000
Cash Cash Equivalents And Short Term Investments	822,000	774,000
Cash And Cash Equivalents	822,000	774,000

Cash Flow

	2026	2025
Free Cash Flow	1,976,000	1,638,000
Repurchase Of Capital Stock	-856,000	-573,000
Repayment Of Debt	-580,000	-2,158,000
Issuance Of Debt	0	-10,000
Capital Expenditure	-831,000	-1,059,000
End Cash Position	822,000	774,000
Beginning Cash Position	1,170,000	2,413,000
Effect Of Exchange Rate Changes	99,000	-24,000
Changes In Cash	-447,000	-1,615,000
Financing Cash Flow	-2,387,000	-3,241,000
Cash Flow From Continuing Financing Activities	-2,387,000	-3,241,000
Net Other Financing Charges	-140,000	-46,000
Proceeds From Stock Option Exercised	14,000	69,000
Cash Dividends Paid	-1,317,000	-1,323,000
Common Stock Dividend Paid	-1,317,000	-1,323,000
Net Common Stock Issuance	-856,000	-573,000
Common Stock Payments	-856,000	-573,000
Net Issuance Payments Of Debt	-88,000	-1,368,000
Net Short Term Debt Issuance	492,000	800,000
Net Long Term Debt Issuance	-580,000	-2,168,000
Long Term Debt Payments	-580,000	-2,158,000
Long Term Debt Issuance	0	-10,000
Investing Cash Flow	-868,000	-1,069,000
Cash Flow From Continuing Investing Activities	-868,000	-1,069,000
Net Other Investing Changes	-121,000	-149,000
Net Business Purchase And Sale	63,000	47,000
Sale Of Business	137,000	161,000
Purchase Of Business	-74,000	-114,000
Net PPE Purchase And Sale	21,000	92,000
Sale Of PPE	21,000	92,000
Capital Expenditure Reported	-831,000	-1,059,000
Operating Cash Flow	2,807,000	2,697,000
Cash Flow From Continuing Operating Activities	2,807,000	2,697,000
Change In Working Capital	-50,000	156,000
Other Non Cash Items	-51,000	-10,000
Stock Based Compensation	39,000	37,000
Deferred Tax	-58,000	-77,000
Deferred Income Tax	-58,000	-77,000
Depreciation Amortization Depletion	565,000	576,000
Depreciation And Amortization	565,000	576,000
Net Income From Continuing Operations	2,362,000	2,164,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

1.08x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$2.0B

vs Positive

Operating Cash Flow

$2.8B

Latest quarter · Buffett's cash reality check

ROIC

nan%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

⚠ Negative Net Assets

Net Assets: -$1.0B

⚠ Negative Net Assets — total liabilities exceed total assets on paper. This is common in companies that aggressively return capital via buybacks and dividends (Apple, McDonald's, Domino's). It does not indicate insolvency if the business generates strong, consistent free cash flow. Focus on FCF and earnings power rather than balance sheet book value for these companies.

Peers & Industry Comparison

Restaurants — Auto-detected peers

Company	Price	Market Cap	P/E	Gross Margin	Net Margin	Revenue
MCD	$276.52	$195.2B	21.88	N/A	N/A	N/A
SBUX Starbucks Corporation	$105.41	$120.2B	47.7	22.4%	6.7%	$37.9B
YUM Yum! Brands, Inc.	$161.14	$43.3B	13.0	44.7%	39.1%	$8.8B
QSR Restaurant Brands International	$77.69	$35.6B	17.1	34.3%	15.3%	$9.8B
DPZ Domino's Pizza Inc	$334.28	$11.0B	18.4	28.9%	12.0%	$5.1B

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.26%

Low — management has little skin in the game

Share Buybacks (Latest Year)

$2.1B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

-0.5% YoY

Debt is declining — management is deleveraging

Leadership Team

Christopher Kempczinski

Chairman President, & CEO

Age 56

Pay: $4,574,244

Ian Frederick Borden CPA

Executive VP & Global CFO

Age 56

Pay: $3,089,533

Gillian McDonald

Executive Vice President & Global Chief Restaurant Experience Officer

Age 59

Pay: $2,311,602

Manuel Steijaert

Executive VP & President of International Operated Markets

Age 54

Pay: $2,228,267

Dexter Congbalay

Vice President of Investor Relations

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	7.83%	55,436,039
Vanguard Capital Management LLC	6.56%	46,396,692
State Street Corporation	5.10%	36,080,505
JPMORGAN CHASE & CO	4.51%	31,923,726
Vanguard Portfolio Management LLC	2.65%	18,781,589
Geode Capital Management, LLC	2.56%	18,114,553
Morgan Stanley	2.12%	15,027,364
Bank of America Corporation	1.55%	10,997,796

Risk Analysis

Beta (Market Risk)

0.43

Low volatility — more stable than the market

Short Interest

2.1% of float

Low short interest — market is not heavily bearish

52-Week Price Range

Low: $229.20 Current: $276.52 High: $341.75

Currently at 42% of 52-week range