McDonald's files an annual report every year since it is a legal requirement according to Section 15(d) or 13 of the 1934 Security Exchange Act. McDonald's yearly report format begins with a brief introduction of the company to summarize the milestones achieved. The preceding section entails a report by the company's management about business operations and the organization's financial status. In this section, the government can analyze business trends and evaluate its performance based on multiple financial metrics (McDonald's Corporation, 2020) . Moreover, the analysis is vital because it helps identify the strategic plan that the business should make to enhance its performance in the future. The report includes risk assessment reports, debts and obligations, shareholders' performance, equity securities, and capital expenditures. Alternatively, multiple financial statements such as income statements, balance sheets, statement of cash flow, and shareholder equity statements help demonstrate business performance in the last year (McDonald, 2020) . McDonald's annual report format is different from other corporations because it considers using numerous financial statements to provide detailed information to the shareholders.
Data presented in the annual reports uses a format that facilitates shareholders' ability to conclude McDonald's performance in the market. Besides giving the financial data, the annual reports include an explanation to justify the likely turn of events and compare McDonald's and other market players. For instance, the 2019 annual report indicates that the company's stock performance was higher because it closed at $242 compared to $174 in S&P 500 Index and $181 Dow Jones Industrials (McDonald, 2020) . The annual report demonstrates the organization's performance using graphical representation to enhance the understanding of the shareholders. The trend in stock performance is evident in all other performance metrics indicating that shareholders make informed decisions due to the access to detailed information. McDonald's annual reports demonstrate the organization's transparency towards its customers, influencing the quality of decisions.
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McDonald's uses the annual reports to explain the company's goals during the last one year. These goals include the acquired profit margin, growth rate, shareholder and equity growth, and reduction of debts. The growth parameters outlined above are vital in evaluating the position of the business in the market. On the other hand, the annual reports outline the company's challenges when executing its operations in the market. For instance, the management analyzes how being an international organization influences the company's aspects, mostly when ranked among the local corporations. Based on the challenges, the managers derive the strategic plan that the business will pursue in the preceding years.
McDonald's annual reports format enhances the information presented in each of the financial statements in multiple ways. Firstly, the management ensures that it has given a commentary to enhance understanding and interpretation of information outlined in the documents. Moreover, before creating the financial statements, the company establishes financial summaries that demonstrate business performance in different areas (Lynch, 2019) . For instance, the 2019 annual report includes the financial summaries on debts and obligations, income per share, revenues, and sales. The summaries help the shareholders and other audiences to understand the report better. Finally, McDonald's includes non-financial data in the report to enhance shareholders' understanding of other factors that can influence the organization's business performance. Thus, the diversity of McDonald's annual report elements plays a critical role in enabling shareholders to make informed decisions.
References
Lynch, A. (2019). How to Successfully Present Financial Information . Blog.Learnsignal.com. https://blog.learnsignal.com/blog/how-to-successfully-present-financial-information
McDonald. (2020). 2019 Annual Report . https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_MCD_2019.pdf
McDonalds Corporation. (2020, January 29). McDonald’s Reports Fourth Quarter and Full Year 2019 Results And Quarterly Cash Dividend . McDonald’s Corporation. https://mcdonaldscorporation.gcs-web.com/news-releases/news-release-details/mcdonalds-reports-fourth-quarter-and-full-year-2019-results-and
