McDonalds vs Wendys - Financial Superiority?
In the time that we currently live in, fast food chains are some of the biggest and most widely known industries in the world, but the question that not many people could answer is, "which company is the biggest?" Almost any cultured person could name a couple of fast food chains, and most likely two of them would be McDonald's and Wendy's, the two companies that I will compare in this essay. It is difficult to distinguish which company would be considered superior because there are many aspects that have to be factored in, in order to make this decision. Earnings per share, current ratio, debt/equity, price/earnings ratio and dividend yield all need to be thought out to get an idea of which is better. Earnings per share are the amount of money one gets for having a single share. The higher the earnings per share, the better it is, because the profit is bigger for the stocks that one owns. McDonald's earnings per share are only $0.17, whereas Wendy's are $0.68. This is likely because even though McDonald's earns far more money a year, they also have a larger number of stockholders. This means that each McDonald's stockholder gets paid less from the larger profit of the two companies. In the article, it mentions that Wendy's is a
The price/earnings ratio explains the difference between the price that a consumer buys the stock for, and their return from the earnings of the company. It is better to have a lower ratio, meaning that you pay less to earn more. McDonald's ratio is $0.21 and Wendy's is $0.22. The article dealing with Wendy's shows figures that show the rise in the cost per share, meaning that all holders of the share earned extra money on a stock they paid a lower price for. The McDonald's article does not deal directly with the price/earnings ratio, but we can detect that the ratio is lower because the price per share is so much lower and the earnings are decreasing as well. This category also shows Wendy's as superior. ttempting to cut this ratio from "7 percent to 10 percent, below a longer term goal of 12% to 15%. The article regarding McDonald's shows that the earnings per share is very low, and therefore needs to publicize that they are doing better. In this ratio, Wendy's is in the better situation. The working capital ratio shows the relationship between the total number of current assets and current liabilities. A company should aim to have at least a 2:1 ratio, but oppositely these companies do not. The current ratio for McDonald's is 1.22:1, and for Wendy's is 1.07:1. These
Some common words found in the essay are:
McDonald's Wendy's, , dividend yield, earnings share, McDonald's McDonald's, fast food, price/earnings ratio, amount money, wendy's article, mcdonald's earnings share, debt equity ratio, money stock, size mcdonald's, liabilities company, fast food chains, current ratio,
Approximate Word count = 865
Approximate Pages = 3 (250 words per page double spaced)
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