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Net Equity: The Value of Your McDonald's Business

Posted by Bill Schiele on Tue, May 10, 2016

An important component in McDonald's Financial Viability Assessment is net equity, a measure of financial health traditionally assessed by looking at the difference between total assets, including the estimated fair market value of restaurant assets, and total liabilities.

Banks consider net equity to gauge the financial strength of a business. Lenders want to know that there is sufficient cash flow to cover the business’s debt service and that there would be sufficient fair market value equity to repay the debt were the business to be sold.

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Topics: McDonald's management, McDonald's Financial Viability Assessment

McDonald's Pre-Debt Cash Flow: What’s “Your Number”?

Posted by Geri Stanus on Tue, Apr 19, 2016

Nearly every important number in the big picture of your McDonald's business is affected by your pre-debt cash flow.

Whether calculating your cash flow coverage ratio (CFCR), evaluating a growth opportunity, valuing your business or even planning for your retirement, your pre-debt cash flow is critical.

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Topics: McDonald's management, McDonald's Financial Viability Assessment

McDonald's Financial Viability: Understanding Your Cash Flow Coverage Ratio

Posted by Tim Littler on Tue, Apr 5, 2016

Within the McDonald's community, we hear lots of talk and concern over the Cash Flow Coverage Ratio (CFCR), and rightly so.

This ratio is a key indicator for your business because it tells you if the cash coming into the business sufficiently covers costs. Essentially, it is the number of times your cash flow covers your debt service (including principal and interest), after your G&A and owner/operator draw.

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Topics: McDonald's management, McDonald's Financial Viability Assessment

Improve Your McDonald's Franchise Working Capital and Liability Turnover Ratio

Posted by Erica Bortz on Tue, Oct 13, 2015

Follow these tips to strengthen key financial ratios that impact the financial health of your McDonald's business.

Action Item: Before you go any further, it will be helpful to gather your most recent balance sheet and follow along using your numbers as you read through this section.

Working capital is defined as the difference between current assets and current liabilities.

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Topics: McDonald's management, McDonald's Financial Viability Assessment

Mapping Out Your Financial Journey with McDonald's

Posted by Angel Chiariello on Tue, Sep 29, 2015

Understanding your Financial Viability Assessment score can help you monitor, strategize, and improve the financial health of your McDonald's business.

It is more important than ever for Owner/Operators to understand and protect their financial viability. With greater financial viability, you're more secure—and more likely to experience future growth and rewrite opportunities for your franchise organization.

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Topics: McDonald's management, McDonald's Financial Viability Assessment

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