McDonalds Vs. Wendy's and do the paper comparing those two companies instead of Dick's and Academy Sports.

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McDonald’s vs. The Wendy’s
Recommendation to Board
McDonald’s Company is one of the giant multinational operators that supply fast foods. The Company has been registering great performance over the last four years. It reported a net profit of USD 6,025,400,000, which was approximately 28.6% of the Company's sales (Finance.yahoo.com). However, the performance is lower compared to the performance growth of the Company from 2016 to 2018. The Company reported an increase of 10% of the net profits from 2016 to 2017. The profits also expanded by 14% from 2017 to 2018 (corporate.mcdonalds.com). The growth decreased in the year 2019 as compared to the previous years’ performance. The net income increased by an approximate of 1.07%. The Company has also been accumulating high levels of debt with a higher amount of liabilities as compared to its assets (Stowell et al., 18). The Company should consider making the following strategies to ensure great performance.
The Company should consider effective management of the inventory. The inventory management system is significant in ensuring that there is a smooth flow of raw materials to the final production of goods (Thind, 22). When the inventory is sluggish, the rate of production will be lower hence reducing the amount of sales revenue. As a multinational operator and a fast-growing company in operations, the Company is typically at risk of mismanagement of the work-in-process. The work-in-process is the portion of inventory that is in the production process but due for completion. When there is mismanagement of WIP, the cost of operations will increase in terms of transportation, warehousing, and additional requirement of labor (Thind, 23). Proper management of the inventory will, therefore, ensure low expenses hence increasing the level of profits.
The Company should develop effective strategies that will ensure optimum control of the company finances. This includes maximizing on the available free cash for running the company operations (Rodrigues et al., 53). The Company should also minimize short-term credit facilities to ensure low-interest costs associated with the loan facilities. Based on the Company's balance sheet, the Company has a high level of liabilities compared to the value of the assets. The assets have a value of USD 47,510,800,000 while the liabilities are at a value of USD 55,721,100,000 (Finance.yahoo). This data reveals the extent of the Company's reliance on debt for the running of its operations. The portion contributing to the liabilities of the Company from the long-term debt is USD 34,118,100,000. The high levels of liabilities put the shareholders at a risk of gaining losses in terms of equity. This information shows that the Company is not maximizing the shareholders' investment.
The company sales have also dropped significantly as compared to the 2016 sales. The 2019 sales have a value of USD 21,076,500,000 while the 2016 sales amounted to 24,621,900,000, indicating a drop of approximately 14.40% (mcdonaldscorporation.gcs-web.com). This drop in sales should be a major concern for the management team. The board should consider the following measures to counter the problem. There should be a change in senior management by placing a new management team that will be creative and productive. The young and creative management will develop and implement new and innovative ideas that will propel the business operations (Rodrigues et al., 54). The business should also hire qualified employees and take a more profound professional development approach. It should ensure that the workers are motivated to work in accordance to the company goals and objectives (Rodrigues et al., 55). The above recommendations are ethical and strategically flexible for consideration.
Motivation
The recent overall performance of McDonald's has been highly stable and prosperous. Despite the stiff competition in the market, the Company has been able to beat its competitors. The Company has also experienced challenges in terms of food security concerns (Stowell et al., 14). The Company operates a large number of franchised restaurants in over 100 countries across the world. The different environmental and market characteristics in the states of operation help in raising and maintenance of the Company's revenues. The Company has a widely known and popular brand that helps its subsidiaries to market the company products (corporate.mcdonalds.com) efficiently. The Company has also developed unique strategies that have helped the company performance to be highly differentiated from its competitors (Stowell., 53). The Company's state of affairs has been great despite the 2019's drop in net profit compared to the 2018 net income.
The following financial highlights indicate the performance level of McDonald’s in 2019. The universal comparable sales rose by 5.9%. The growth reflected the growth in the international segment of operation by 6.1% (mcdonaldscorporation.gcs-web.com), 5.0% in the US, and 7.25 in the licensed foreign operatives. The consolidated revenues increased by a low rate of 3% in terms of constant currencies at $21.1 billion. The system-wide sales of the group increased by 7% to $100.2 billion as the company earnings per share (diluted) of $7.88 multiplied by 5% (mcdonaldscorporation.gcs-web.com). The cash resulting from company operations estimated to $8.1 billion. The free-cash-flow amounted to $5.7 billion, reflecting a 36% increase in comparison to the prior year.
The financial ratios of the McDonald's for the year 2019 are also essential in communicating the financial position of the Company. The Company experienced a gross profit margin of 52.74%, thus portraying a significant amount of revenues that the Company acquired from its restaurant sales. The company operations also had a massive effect on the financial potential of the Company (corporate.mcdonalds.com). For the year 2019, McDonald’s had an operating profit margin of 42.16%, thus reflecting the level of contribution of the company operations to its profitability. The net profit margin was approximately 28.59%, which portrays the high profitability index of the business (mcdonalscorporation.gcs-web.com). The financial ratios mentioned above deal with the profitability communication concerning the company operations. The financial ratios are reflecting a stable profitability image of the Company.
Financial Report Discussion
There are various notable features in McDonald’s financial reports. The first item of interest is the company revenues. The Company reported that the system-wide sales of the group increased by 7% to $100.2 billion (Finance.yahoo). However, the increase was only impacted by a mere 3% increase in the consolidated revenues of the Company. Notably, the company revenues have been decreasing as compared to the 2016 revenues. The low level of the company revenues has been felt on the Company's growth in terms of the net annual earnings. McDonald's reported an increase of 10% of the net profits from 2016 to 2017. The gains also expanded by 14% from 2017 to 2018 (corporate.mcdonalds.com). The growth decreased in the year 2019 as compared to the previous years’ performance. The net income growth experienced in 2019 was by an increase of 1.07% as compared to the 2018 net income.
McDonald's reveals that the decrease in revenues is affected by different factors. The low growth was as a result of the impact in the comparable sales of the Company. The Company defines comparable sales as the sales transactions recorded by all the restaurants that have been in operation for not less than thirteen months (mcdonaldscorporation.gcs-web.com). It includes restaurants that are run the Company and those that are under franchisees. McDonald's further relates the low growth to the temporary closure of some of the company restaurants. The temporal disclosure was as a result of different factors such as rebuilding, road construction, natural pandemics, and reimaging (mcdonaldscorporation.gcs-web.com). The revenues were also significantly impacted by hyper-inflationary effects ...