Question

perform a dupont analysis of McDonalds

Answer 1

McDonalds has a negative equity since 2016 due to that dupont analysis will not give any significant result but for the analysis purpose we can do that.

ROE calculation using DuPont = profit margin * asset turnover * equity multiplier

= net income/revenue * revenue/total asset * total asset/equity

= 5804/20767 * 20767/46467 * 46467/-6551

= 27.95% * 44.69% * -7.09

= -88.6%

Thus as per dupount analysis one can say that McDonalds has a good profit margin and asset turnover but due to negative equity its ROE is negative.