Mcdonalds Project Report

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“One world, One

Burger”
- McDonald’s
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CERTIFICATE
3
AKNOWLEDGEMENT
I HAVE GREAT PLEASURE IN PRESENTING MY PROJECT

ENTITLED MC DONALD I TAKE THIS AN OPPORTUNITY TO
EXPRESS MY DEEPEST GRATITUDE & INEPTNESS TO ALL
THOSE WHO CONTRIBUTED INDIRECTLY THEIR VALUABLE
TIME & ASSISTED ME IN MY PROJECT.
I WOULD LIKE TO THANK MY PROJECT GUIDES, ALL

THE FACULTY MEMBERS. FOR THIS APPROVAL & ALSO FOR
HER VALUABLE GUIDANCE & SUPPORT IN COMPLETING MY
PROJECT OF MC DONALD.
LAST BUT NOT THE LEAST I WOULD LIKE TO EXPRESS MY

SINCERE THANKS TO THOSE WHO DIRECTLY & INDIRECTLY
HELPED IN THIS PROJECT.
SUBMITTED BY,
AJAY AVHAD
PARAG AWATE
SNEHA VINEKAR
4
DECLARATTION
WE STUDENTS OF BIRLA COLLEGE, STUDENT OF

SY. B.M.S (SEMESTER 4) HEREBY DECLARES THAT
WE HAVE ACCORDINGLY COMPLETED MY PROJECT
ON MC DONALDS IN THE YEAR 2008- 2009.
THE INFORMATION SUBMITTED IS TRUE
&ORIGINAL TO THE BEST OF MY KNOWLEDGE.
5
PAGE
SR PARTICULARS NO.
NO.
1. INTRODUCTION 7-9
2. CHAPTER 1 10-18
COMPANY PROFILE
3. CHAPTER 2 19-24
ANALIYSIS ON MCDONALDS AS A SMALL
SCALE CORPORATION IN THE BEGINNING
CHAPTER 3 25-30
4. ANALIYSIS ON MCDONALDS
CORPORATION AT INTERNATIONAL
LEVEL.
CHAPTER 4
5. ANALIYSIS ON MCDONALDS ON PRODUTIVITY 31-35
& QUALITY.
CHAPTER 5
6. ANALIYSIS ON MCDONALDS 36-41
ADVERTISEMENT AND PUBILE RELATIONS.
CHAPTER 6
7. ANALIYSIS ON VALUATION OF TAX OF 42-47
MCDONALDS CORPORATION.
CHAPTER 7 48-51
8. ANALIYSIS ON MCDONALDS IMPORT-
EXPORT.
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INTRODUCTION
Although the realm of accounting and finance has

often been viewed as dull ‘bean counting’, in today’s modern and
competitive business environment, the finance department should
be at the heart of any company, encompassing a variety of
functions that go beyond its traditional financial reporting role.
While it is still a priority for accountants to ensure a company’s
financial statutory accounts meet legal requirements, dynamic
companies such as McDonald’s have shifted the focus of their
accounting and finance function to additionally include the
evaluation of past performance and appraisal of future
opportunities, helping to ensure the
Company maximises its strategic capabilities.
McDonald’s Restaurants UK Limited, a wholly owned

subsidiary of the U.S. parent company, opened its first UK
restaurant in Woolwich in 1974. There are now 1,200 restaurants
operating in the UK which, despite representing only 4% of the
total number of McDonald’s restaurants worldwide, contribute
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7% of global profits, making the UK a very important financial

market for McDonald’s shareholders.
McDonald’s understands the value of an integrated

accounting and finance function, extending from the restaurant
floor up to the board of directors. Each individual McDonald’s
restaurant is structured as an independent business, with
restaurant management responsible for its financial performance,
supported by the centralised Accounting & Finance department.
DEPARTMENT STRUCTURE & FUNCTION
McDonald’s Finance Department has two key areas of

responsibility: financial reporting and management accounting.
Although each of these functions has different priorities, working
together ensures the best financial position for the company now
and for the future.
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HOW DOES MCDONALD’S MAKE A PROFIT?
McDonald’s has two sources of profit:

• Sales made by company-owned restaurants
• Rental and royalty income from franchised restaurants.
RESTAURANT SALES
McDonald’s retains all of the profit earned by company-owned

restaurants. An example Profit & Loss Statement for a restaurant
is shown left and highlights how food and labour constitute a
restaurant’s largest costs. In addition to variable costs, which
increase or decrease depending on the level of sales, McDonald’s
also incurs costs that are largely fixed, for example utilities and
advertising, which need to be paid for even before the restaurant
makes any sales. Increasing sales and controlling costs are
fundamental to ensuring the profit of each restaurant is either
maintained or increased.
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CHAPTER:-1
COMPANY PROFILE
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McDonalds is a leader in convenient foods and

beverages, with revenues of about $23 billion and over i.6 million
employees serving the customer’s world wide. The company
consists of the snack business of Beverages and Foods. PepsiCo
brands are available in nearly 115 countries having more than
24,500 restaurants in the world providing 24 hour service. Having
about 1 billon customers to be served all over the world.
McDonalds’s success is the result of superior products,

high standards of performance, distinctive competitive strategies
and the high integrity of our people. McDonalds is continuing to
expand and introduce new alternative beverages in the market.
Approximately 85% of McDonald’s restaurant businesses world-
wide are owned and operated by franchisees .All franchisees are
independent, full-time operators. McDonald’s was named
Entrepreneur’s Number-one franchise for 1997
Our mission is to be the world's premier consumer

Products Company focused on convenient foods and beverages.
We seek to produce healthy financial rewards to investors as we
provide opportunities for growth and enrichment to our
employees, our business partners and the communities in which
we operate. And in everything we do, we strive for honesty,

fairness and integrity you could now join our team. Greater
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variety and quality choices surprise and delight customers with

the food and beverage they desire.
McDonald’s corp. is currently one of the most successful

consumer products company in the world with annual revenues
exceeding $23 million and has more than 1.6 million employees.
McDonald’s products are recognized and are most respected all

around the globe. Currently, its divisions operate in all over the
world in beverages, snack foods, and restaurants. The
corporations increasing success has been based on high standards
of performance, marketing strategies, competitiveness,
determination, commitment, and the personal and professional
integrity of their people, products and business practices.
McDonald’s believes their success depends upon the quality

and value of their products by providing a safe, whole some,
economically efficient and a healthy environment for their
customers; and by providing a fair return to their investors while
maintaining the highest standards of integrity.
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HISTORY OF McDONALDS.
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The McDonald's History - 1954 to 1955

Raymond Albert Kroc 1902-1984, A Salesman
Ray Kroc mortgaged his home and invested
his entire life savings to become the
exclusive distributor of a five-spindled milk
shake maker called the Multimixer. Hearing
about the McDonald's hamburger stand in
California running eight Multimixers at a time,
he packed up his car and headed West. It
was 1954. He was 52 years old.
Dick and Mac McDonald's Restaurant, San Bernardino,
California
Ray Kroc had never seen so many people

served so quickly when he pulled up to take
a look. Seizing the day, he pitched the idea
of opening up several restaurants to the
brothers Dick and Mac McDonald, convinced
that he could sell eight of his Multimixers to
each and every one. "Who could we get to
open them for us?" Dick McDonald said.
"Well," Kroc answered, "what about me?"
Where it all began, Des Plaines, Illinois
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Ray Kroc opened the Des Plaines restaurant

in 1955. First day's revenues-$366.12! No
longer a functioning restaurant, the Des
Plaines building is now a museum containing
McDonald's memorabilia and artifacts,
including the Multimixer!
Ray Kroc At Work
"If you've got time to lean, you've got time to clean,"

Ray Kroc preached to his troops. Heeding his own
words, here the Chairman of the Board cleans the
parking lot of the first McDonald's franchise in Des
Plaines, Illinois.
Ronald McDonald, In Any Language He Means "Fun!"
"The smile known around the world," In his first TV

appearance in 1963 the happy clown was portrayed by
none other than Willard Scott.
Fred Turner And Ray Kroc, Architects Of A Dream
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Here Ray Kroc (right) and Fred Turner study the design
which would replace the red and white tile buildings that
had become landmarks throughout the U.S. Called
Kroc's first "grill man extraordinaire," Turner is today
Senior Chairman of the Board.
McDonald's Comes To Wall Street
In 1965 McDonald's went public with the company's first

offering on the stock exchange. A hundred shares of
stock costing $2,250 dollars that day would have
multiplied into 74,360 shares today, worth
approximately $3.3 million on December 31, 2006. In
1985 McDonald's was added to the 30-company Dow
Jones Industrial Average.
A Big Idea Called "Big Mac"
"Introduced systemwide in 1968, the Big Mac was the

brainchild of Jim Delligatti, one of Ray Kroc's earliest
franchisees, who by the late 1960s operated a dozen
stores in Pittsburgh."
The Egg McMuffin
Introduced in 1973, the Egg McMuffin was developed

by owner operator Herb Peterson.
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The First Ronald McDonald House in Philadelphia, PA
In 1974 Fred Hill of the Philadelphia Eagles teamed up

with McDonald's to create Ronald McDonald House.
Here the families of critically ill children have a place to
call home while they're away from home as the young
patients undergo treatment for their conditions.
The Happy Meal
Since 1979 the Happy Meal has been making kids visits
that much more special. Clubs the world over collect
Happy Meals toys and boxes.
The Future Begins Now
McDonald's Express for a world that can't slow

down!. McDonald's is popping up in more non-
traditional locations like Amoco and Chevron
stations, with full menu offerings and dining room
seating, just like you'll find in a traditional
McDonald's.
FACTS & FIGURES
1.6million
Restaurant employees System wide dedicated to serving our
customers
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540million
Snack Wraps were sold in 2007
24,500
Restaurants around the world offer extended or 24-hour
service
1billion
More customers were served in 2007 than in 2006
115
Countries participated in one of McDonald’s most successful
promotions ever –
Our tie-in with DreamWorks’ Shriek the Third™
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CHAPTER:-2
ANALIYSIS ON MCDONALDS AS
A SMALL SCALE
CORPORATION IN THE
BEGINNING.
McDonald’s is one of the leading restaurant chains in

the world, touching the lives of people everyday. The long
journey of the burger brand started in 1940, when two brothers,
Dick and Mac McDonald opened the first McDonald’s restaurant
in San Bernardino, California. Initially, they owned a hotdog
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stand, but after establishing the restaurant they served around 25

items, which were mostly barbequed. It became a popular and
profitable teen hangout. In 1948, the brothers closed and
reopened the restaurant to sell only hamburgers, milkshakes and
French fries.
As per the information of the McDonald’s history, the

major revenue came from hamburgers, which were sold at a
nominal price of 15 cents. The restaurant gradually became
famous and the McDonald brothers begin franchising their
restaurant in the year 1953. The first franchise was taken by Neil
Fox and under it; the second Mc Donald’s restaurant was opened
in Fresno, California. It was the first to introduce the Golden
Arch design. The third and fourth restaurants were opened in
Saginaw, Michigan and Downey, California, respectively.
The business began in 1940, with a restaurant opened

by siblings Dick and Mac McDonald in San Bernardino,
California. Their introduction of the "Speedee Service System" in
1948 established the principles of the modern fast-food
restaurant. The original mascot of McDonald's was a man with a
chef's hat on top of a hamburger shaped head whose name was
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"Speedee." Speedee was eventually replaced with Ronald

McDonald in 1963.
The present corporation dates its founding to the opening

of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on
April 15, 1955 , the ninth McDonald's restaurant overall. Kroc
later purchased the McDonald brothers' equity in the company
and led its worldwide expansion and the company became listed
on the public stock markets in 1965. Kroc was also noted for
aggressive business practices, compelling the McDonald's
brothers to leave the fast food industry. The McDonald's brothers
and Kroc feuded over control of the business, as documented in
both Kroc's autobiography and in the McDonald brothers
autobiography. The site of the McDonald brothers' original
restaurant is now a monument.
With the expansion of McDonald's into many international

markets, the company has become a symbol of globalization and
the spread of the American way of life. Its prominence has also
made it a frequent topic of public debates about obesity, corporate
ethics and consumer responsibility.
MCDONALD'S India Pvt Ltd (MIPL), the wholly-owned

subsidiary of the US-based fast-food giant, McDonald's
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Corporation, is likely to put on hold its earlier declared expansion

plan of opening 80 restaurants in India by 2003.
McDonald’s has 132 restaurants in India of which 79 are in North & East
India and 53 in West & South India.
79 restaurants in North & East India: with
33 in Delhi
• 22 in Uttar Pradesh – Noida (5),

• Ghaziabad (4), Mathura (1) (Highway and Drive Thru), Kanpur (2),
Meerut (2), Lucknow (4), Agra (1), Allahabad (1), Varanasi (2)
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• 11 in Haryana - Faridabad (3), Manesar (1) (Highway and Drive -

Thru), Gurgaon (5), Karnal (1) (Highway and Drive - Thru), Panipat
(1)
• 7 in Punjab - Chandigarh (2), Ludhiana (2), Doraha (1) (Highway
and Drive - Thru), Jalandhar (1), Patarsi (1) (Highway and Drive -
Thru)
• 3 in Rajasthan - Jaipur (3)
• 1 in Uttaranchal - Dehradun (1)
• 1 in West Bengal – Kolkata (1)
• 1 in Himachal Pradesh- Jabli (1).
53 Restaurants in West & South India:
32 in Maharashtra – Mumbai (23), Pune (8), Nasik (1)
• 7 in Gujarat – Ahmedabad (4), Vadodara (2), Surat (1)

• 7 in Karnataka – Bangalore(7)
• 4 in Andhra Pradesh – Hyderabad (4), 3 in Madhya Pradesh –
Indore (3)
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1996 The first McDonald's restaurant opened on Oct. 13, at Basant Lok,
Vasant Vihar, New Delhi. It was also the first McDonald's
restaurant in the world not serving beef on its menu
1997 The first Drive - Thru restaurant at Noida (UP)
The first disabled friendly store at Noida (UP)

1999 The first Mall location restaurant at Ansal Plaza (New Delhi)
2000 The first highway restaurant at Mathura (UP)
2001 The first thematic restaurant at Connaught Place (New Delhi)
2002 The first restaurant in a food court at 3C's, Lajpat Nagar (New
Delhi)
The first restaurant at the Delhi Metro Station at Inter State Bus
Terminus
The first annual fundraiser in association with ORBIS and Dr.

Shroff's Charity Eye Hospital.(Delhi)
2003 The first Dessert Kiosk - Faridabad (Haryana)
2003- Indigenous products like McAloo Tikki, McVeggie and Pizza
04 McPuff exported to Middle East countries
2004 McDonald's Delivery Service (McDeliveryTM ) introduced in New
Delhi
2006 McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)-
another first initiative by McDonald's India
100th McDonald's Restaurant in India
10 Year Anniversary
2007 The first Restaurant opened in the Eastern Region at Park Street,
Kolkata (West Bengal)
The first Restaurant opened at Airport.(Domestic Airport, New
Delhi)
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CHAPTER:-3
ANALIYSIS ON MCDONALDS
CORPORATION AT
INTERNATIONAL LEVEL.
McDonald's International through its wholly owned

subsidiary McDonald's India entered into two JVs, one with
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Connaught Plaza Restaurants Pvt. Ltd. in the Northern & Eastern

region and another with Hard Castle Restaurants Pvt. Ltd. in the
Western & Southern region
McDonald's restaurants are found in 119 countries and

territories around the world and serve nearly 47 million customers
each day. McDonald's operates over 31,000 restaurants
worldwide, employing more than 1.5 million people. The
company also operates other restaurant brands, such as Piles
Café, and has a minority stake in Pret a Manger. The company
owned a majority stake in Chipotle Mexican Grill until
completing its divestment in October 2006. Until December 2003,
it also owned Donatos Pizza. On August 27, 2007, McDonald's
sold Boston Market to Sun Capital Partners.
Most standalone McDonald's restaurants offer both

counter service and drive-through service, with indoor and
sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and
Drive, or McDrive as it is known in many countries, often has
separate stations for placing, paying for, and picking up orders,
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though the latter two steps are frequently combined; it was first
introduced in Arizona in 1975, following the lead of other fast-
food chains. In some countries "McDrive" locations near
highways offer no counter service or seating. In contrast,
locations in high-density city neighborhoods often omit drive-
through service. There are also a few locations, located mostly in
downtown districts, that offer Walk-Thru service in place of
Drive-Thru. Especially themed restaurants also exist, such as the
"Solid Gold McDonald's," a 1950s rock-and-roll themed
restaurant. In Victoria, British Columbia, there is also a
McDonald's with a 24 carat (100%) gold chandelier and similar
light fixtures.
Each McDonald's restaurant is operated by a franchisee, an

affiliate, or the corporation itself. The corporations' revenues
come from the rent, royalties and fees paid by the franchisees, as
well as sales in company-operated restaurants. McDonald's
revenues grew 27% over the three years ending in 2007 to $22.8
billion, and 9% growth in operating income to $3.9 billion.
Full year 2008 highlights included:
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• Global comparable sales increase of 6.9%, including

U.S. 4.0%, Europe 8.5%, and Asia/Pacific, Middle East and
Africa 9.0%
• Growth in McDonald’s combined operating margin of 320
basis points to 27.4%, after adjusting for the impact of the
2007 Latin America transaction
• Operating income increases in the U.S. 8%, Europe 23%
(17% in constant currencies) and Asia/Pacific, Middle East
and Africa 33% (28% in constant currencies)
• Earnings per share from continuing operations of $3.76, an
increase of 16% (14% in constant currencies), after adjusting
for the impact of the 2007 Latin America transaction
Return of $5.8 billion to shareholders through shares repurchased

and dividends paid, including a 33% increase in the quarterly
cash dividend to $0.50 per share for the fourth quarter – bringing
our current annual dividend rate to $2.00 per share
Individual franchise arrangements generally include a lease
and a license and provide for payment of initial fees, as well as
continuing rent and royalties to the Company based upon a
percent of sales with minimum rent payments that parallel the
Company’s underlying leases and escalations (on properties that
are leased). McDonald’s franchisees are granted the right to
operate a restaurant using the McDonald’s System and, in most
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cases, the use of a restaurant facility, generally for a period of 20

years. Franchisees pay related occupancy costs including property
taxes, insurance and maintenance. In addition, in certain markets
outside the U.S., franchisees pay a refundable, non interest-
bearing security deposit. Foreign
affiliates and developmental licensees pay a royalty to the
Company based upon a percent of sales, as well as initial fees.
The results of operations of restaurant businesses purchased and
sold in transactions with franchisees, affiliates and others were
not material to the consolidated financial statements for periods
prior to purchase and sale.
McDonald's India…… Culturally Sensitive
McDonald's worldwide is well known for the high degree of

respect for the local customs and culture. McDonald’s has
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developed a menu especially for India with vegetarian selections

to suit Indian tastes and preferences. Keeping in line with this,
McDonald's does not offer any beef or pork items in India. In
the last decade it has introduced some vegetarian and non-
vegetarian products with local flavours that have appealed to the
Indian palate. There have been continuous efforts to enhance
variety in the menu by developing more such products.
McDonald's has also re-engineered its operations repeatedly in its

11 years in India to address the special requirements of a
vegetarian menu. Vegetable products are 100% vegetarian, i.e.
• They are prepared separately, using dedicated equipment and

utensils.
• Only pure vegetarian oil is used as a cooking medium.
• Cheese and sauces are completely vegetarian and egg less.
• Separation of vegetarian and non-vegetarian food products is
maintained throughout the various stages of procurement,
cooking and serving.
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CHAPTER:-4
ANALIYSIS ON MCDONALDS ON
PRODUTIVITY & QUALITY.
The site of the first McDonald's to be franchised by Ray

Kroc is now a museum in Des Plaines, Illinois. The building is a
reproduction of the original, which was the ninth McDonald's
restaurant.
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To accommodate the current trend for high quality coffee

and the popularity of coffee shops in general, McDonald's
introduced McCafés. The McCafé concept is a café-style
accompaniment to McDonald's restaurants. McCafé is a concept
of McDonald's Australia, starting with Melbourne in 1993.
Today, most McDonald's in Australia have McCafés located
within the existing McDonald's restaurant. In Tasmania there are
McCafés in every store, with the rest of the states quickly
following suit. After upgrading to the new McCafé look and feel,
some Australian stores have noticed up to a 60% increase in sales.
As of the end of 2003 there were over 600 McCafés worldwide.
Some locations are connected to gas stations/convenience

stores, while others called McDonald's Express have limited
seating and/or menu or may be located in a shopping mall. Other
McDonald's are located in Wal-Mart stores. McStop is a location
targeted at truckers and travelers which may have services found
at truck stops. McDonald's announced on May 22, 2008 that, in
the U.S. and Canada, it will be introducing cooking oil for its
French fries that contain no trans fats. The company will use
canola-based oil with corn and soy oils by year's end for its baked
items, pies and cookies.
In a bid to tap into growing consumer interest in the
provenance of food, the fast-food chain recently switched its
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supplier of both coffee beans and milk. UK chief executive Steve

Easterbrook said: "British consumers are increasingly interested
in the quality, sourcing and ethics of the food and drink they
buy". McDonald's coffee is now brewed from beans taken from
stocks that have been certified by the Rainforest Alliance, a
conservation group. Similarly, milk supplies used for its hot
drinks and milkshakes have been switched to organic sources
which could account for 5% of the UK's organic milk output. The
company has also expanded the McDonald's menu in recent
decades to include alternative meal options, such as salads and
snack wraps, in order to capitalize on growing consumer interest
in health and wellness. McDonald's predominantly sells
hamburgers, various types of chicken sandwiches and products,
French fries, soft drinks, breakfast items, and desserts. In most
markets, McDonald's offers salads and vegetarian items, wraps
and other localized fare. This local deviation from the standard
menu is a characteristic for which the chain is particularly known,
and one which is employed either to continue by regional food
taboos (such as the religious prohibition of beef consumption in
India) or to make available foods with which the regional market
is more familiar (such as the sale of Mc Rice in Indonesia). There
have been continuous efforts to enhance variety in the menu by
developing more such products.
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McDonald's has also re-engineered its operations

repeatedly in its 11 years in India to address the special
• Most Respected Company' for four consecutive
years, 2003-2007 in the Food Services sector, by
Businessworld
• Most Wanted Brand of the Year' Award 2003 &

2004 by Franchising Holdings India Ltd.
• Retailer of the Year' Award for catering services,

2004-2006 at the Images Retail Awards.
• The 'Most Preferred Fast Food Outlet' 2006 &

2007 by Awaaz Consumer Award, hosted by
CNBC.
• Star Retailer - The Consumer Way, Food Services

Retailer' of the Year 2006 & 2007, by Franchise
India
• Amity Corporate Excellence Award'-in 2007 &

2008
requirements of a vegetarian menu. Vegetable products are 100%

vegetarian, They are prepared separately, using dedicated
equipment and utensils. Only pure vegetarian oil is used as a
cooking medium. Cheese and sauces are completely vegetarian
and egg less. Separation of vegetarian and non-vegetarian food
products is maintained throughout the various stages of
procurement, cooking and serving.
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McDonald's India - A decade of quality service

For its unparalleled benchmarks established in the QSR sector
McDonald’s India has been bestowed with many prestigious
awards. To name a few:
CHAPTER:-5
ADVERTISEMENT AND PUBILE
RELATIONS.
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Over the years, McDonald's has developed TV advertising

campaigns that have become, like McDonald's, a part of our lives
and culture. McDonald's commercials have focused not only on
product, but rather on the overall McDonald's experience,
portraying warmth and a real slice of every day life. This "image"
or "reputation" advertising has become a trademark of the
company and created many memorable television moments and
themes, including:-
McDonald's is Your Kind of Place (1967)

You Deserve a Break Today (1971)
We Do it All for You (1975)
Twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesa
meseedbun (1975)
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You, You're The One (1976)

Nobody Can Do It Like McDonald's Can (1979)
Renewed: You Deserve a Break Today (1980 & 1981)
Nobody Makes Your Day Like McDonald's Can (1981)
McDonald's and You (1983)
It's a Good Time for the Great Taste of McDonald's (1984)
Good Time, Great Taste, That's Why This is My Place (1988)
Food, Folks and Fun (1990)
McDonald's Today (1991)
What You Want is What You Get (1992)
Have you Had your Break Today? (1995)
My McDonald's (1997)
Did Somebody Say McDonald's (1997)
We Love to See You Smile (2000)
There's a little McDonald's in Everyone (2001) - Canada Only
I’m lovin' it (2003)
McDonald's has for decades maintained an extensive advertising

campaign. In addition to the usual media (television, radio, and
newspaper), the company makes significant use of
billboards(outdoors, on which large advertisements or notices are
posted.) and signage, sponsors sporting events from ranging from
Little League to the Olympic Games, and makes coolers of
orange drink with their logo available for local events of all kinds.
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Nonetheless, television has always played a central role in the

company's advertising strategy.
EMPLOYEE BENEFIT PLANS
The Company’s Profit Sharing and Savings Plan for U.S.-

based employees includes a 401(k) feature, a leveraged employee
stock ownership (ESOP) feature, and a discretionary employer
profit sharing match. The 401(k) feature allows participants to
make pre-tax contributions that are partly matched from shares
released under the ESOP. The Profit Sharing and Savings Plan
also provides for a discretionary employer profit sharing match at
the end of the year for those eligible participants who have
contributed to the 401(k) feature. All contributions and related
earnings can be invested in several investment alternatives as well
as McDonald’s common stock in accordance with each
participant’s elections. Participants’ contributions to the 401(k)
38
feature and the discretionary employer match are limited to 20%

investment in McDonald’s common stock. The Company also
maintains certain supplemental benefit t plans that allow
participants to (i) make tax-deferred contributions
and (ii) receive Company-provided allocations that cannot be
made under the Profit Sharing and Savings Plan because of
Internal Revenue Service limitations. The investment alternatives
and returns are based on certain market-rate investment
alternatives under the Profit Sharing and Savings Plan. Total
liabilities were $415.3 million at December 31, 2007 and $378.6
million at December 31, 2006 and were included in other long-
term liabilities in the Consolidated balance sheet. The Company
has entered into derivative contracts to hedge market-driven
changes in certain of the liabilities. At December 31, 2007,
derivatives with a fair value of $100.8 million indexed to the
Company’s stock as well as an investment totalling $82.0 million
indexed to certain market indices were included in miscellaneous
other assets in the Consolidated balance sheet. All changes in
liabilities for these nonqualified plans and in the fair value of the
derivatives are recorded in selling, general & administrative
expenses. Changes in fair value of the derivatives indexed to the
Company’s stock are recorded in the income statement because
39
the contracts provide the counterparty with a choice to settle in

cash or shares.
Total U.S. costs for the Profit Sharing and Savings Plan,
including nonqualified benefits and related hedging activities,
were (in millions): 2007–$57.6; 2006–$60.1; 2005–$58.0. Certain
subsidiaries outside the U.S. also offer profit sharing, stock
purchase or other similar benefit plans. Total plan costs outside
the U.S. were (in millions): 2007–$62.7; 2006–$69.8; 2005–
$54.1. The total combined liabilities for international retirement
plans were $129.4 million and $197.6 million at December 31,
2007 and 2006, respectively, primarily in Canada and the U.K.
Other postretirement benefits and post-employment benefits were
immaterial.
REASON TO WORK WITH MCDONALDS
• Fast-track Career Progression

• Young , Energetic & Flexible
Environment
• Excellent learning Potential
• Dignity of Labour
• World class Training Systems
• Global Exposure 40
• Good Benefits
CHAPTER:-6
ANALIYSIS ON VALUATION OF
TAX OF MCDONALDS
CORPORATION.
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The Company records a valuation allowance to reduce

its deferred tax assets if it is more likely than not that some
portion or all of the deferred assets will not be realized. While the
Company has considered future taxable income and ongoing
prudent and feasible tax strategies, including the sale of
appreciated assets, in assessing the need for the valuation
allowance, if these estimates and assumptions change in the
future, the Company may be required to adjust its valuation
allowance. This could result in a charge to, or an increase in,
income in the period such determination is made. In addition, the
Company operates within multiple taxing jurisdictions and is
subject to audit in these jurisdictions. The Company records
accruals for the estimated outcomes of these audits, and the
accruals may change in the future due to new developments in
each matter. During 2007, the Company recorded a $316 million
benefit as a result of the completion of an IRS examination of the
Company’s 2003-2004 U.S. tax returns. During 2005, the
Company recorded a $179 million benefit due to the completion
of an IRS examination of the Company’s 2000-2002 U.S. tax
returns. The Company’s 2005-2006 U.S. tax returns are under
audit and the completion is expected in late
2008 or early 2009.
42
Deferred U.S. income taxes have not been recorded for

temporary differences totalling $6.7 billion related to investments
in certain foreign subsidiaries and corporate joint ventures. The
temporary differences consist primarily of undistributed earnings
that are considered permanently invested in operations outside the
U.S. If management’s intentions change in the future, deferred
taxes may need to be provided.
43
BALANCE SHEET OF MCDONALDS 2007-08
44
PERIOD
30-Jun-07 31-Mar-07 31-Dec-06 30-Sep-06
ENDING
Assets
Current Assets
Cash And
Cash 2,142,100 2,438,400 2,136,400 4,282,700
Equivalents
Short Term
- - - -
Investments
Net
784,600 848,000 904,200 812,500
Receivables
Inventory 1,055,500 143,700 149,000 144,500
Other
Current 379,200 449,300 435,700 596,000
Assets
Total Current
4,361,400 3,879,400 3,625,300 5,835,700
Assets
Long Term
1,060,100 1,064,400 1,036,200 1,032,300
Investments
Property
Plant and 20,106,600 20,975,200 20,845,700 20,526,200
Equipment
Goodwill 2,198,300 2,254,300 2,209,200 2,156,100
Intangible
- - - -
Assets
Accumulated
- - - -
Amortization
Other Assets 1,268,500 1,300,200 1,307,400 1,278,900
Deferred
Long Term
- - - -
Asset
Charges
Total Assets 28,994,900 29,473,500
45
29,023,800 30,829,200
46
Liabilities
Current Liabilities
Accounts Downloaded from a2zmba.blogspot.com
2,120,900 2,451,000 2,739,000 4,122,100
Payable
Short/Current
Long Term 288,200 613,500 17,700 454,200
Debt
Other Current
1,020,500 - 251,400 -
Liabilities
Total Current
3,429,600 3,064,500 3,008,100 4,576,300
Liabilities
Long Term
7,885,500 8,199,900 8,416,500 8,569,400
Debt
Other
1,652,500 1,471,000 1,074,900 1,154,300
Liabilities
Deferred Long
Term Liability 941,600 971,100 1,066,000 1,002,900
Charges
Minority
- - - -
Interest
Negative
- - - -
Goodwill
Total
13,909,200 13,706,500 13,565,500 15,302,900
Liabilities
Stockholders' Equity
Misc Stocks
Options - - - -
Warrants
Redeemable
Preferred - - - -
Stock
Preferred
- - - -
Stock
Common
16,600 16,600 16,600 16,600
Stock
Retained
25,881,200 26,592,500 25,845,600 24,585,700
Earnings
Treasury
(14,832,700) (14,371,900) (13,552,200) (11,858,500)
Stock
Capital
3,957,000 3,731,300 3,445,000 3,228,200
Surplus
Other (201,500)
Stockholder 63,600 47 (296,700) (445,700)
Equity
Total
CHAPTER:-7
48
IMPORT- EXPORT.
The business is managed as distinct geographic segments.

Significant reportable segments include the United States (U.S.),
Europe, and Asia/Pacific, Middle East and Africa (APMEA). In
addition, throughout this report we present “Other Countries &
Corporate” that includes operations in Canada and Latin America,
as well as Corporate activities and certain investments. The U.S.,
Europe and APMEA segments account for 35%, 39% and 16% of
49
total revenues, respectively. France, Germany and the United

Kingdom (U.K.), collectively, account for approximately 60% of
Europe’s revenues; and Australia, China and Japan a 50%-owned
affiliate accounted for under the equity method), collectively,
account for over 50% of APMEA’s revenues. These six markets
along with the U.S. and Canada are referred to as “major
markets” throughout this report and comprise over 70% of total
revenues. The Company continues to focus its management and
financial resources on the McDonald’s restaurant business as we
believe the opportunities for long-term growth remain signifi
cant. Accordingly, during the third quarter 2007, the Company
sold its investment in Boston Market. In 2006, the Company
disposed of its investment in Chipotle Mexican Grill (Chipotle)
via public stock offerings and a tax-free exchange for
McDonald’s common stock. As a result of the disposals during
2007 and 2006, both Boston Market’s and Chipotle’s results of
operations and transaction gains have been reflected as
discontinued operations for all periods presented. In analyzing
business trends, management considers a variety of performance
and financial measures including comparable sales growth,
System wide sales growth, restaurant margins and returns.
50
• Constant currency results exclude the effects of foreign currency

translation and are calculated by translating current year results at
prior year average exchange rates. Management reviews and
analyzes business results in constant currencies and bases certain
compensation plans on these results because we believe they
better represent the underlying business trends.
• Comparable sales are a key performance indicator used within

the retail industry and are indicative of acceptance of the
Company’s initiatives as well as local economic and consumer
trends. Increases or decreases in comparable sales represent the
percent change in constant currency sales from the same period in
the prior year for all restaurants in operation at least thirteen
months, including those temporarily closed. Some of the reasons
restaurants may be temporarily closed include road construction,
reimaging or remodelling, rebuilding, and natural disasters.
McDonald’s reports on a calendar basis and therefore the
comparability of the same month, quarter and year with the
corresponding period of the prior year will be impacted by the
mix of days.
The number of weekdays, weekend days and timing of
holidays in a given timeframe can have a positive or negative
impact on comparable sales. The Company refers to this impact
51
as the calendar shift/trading day adjustment. This impact varies

geographically due to consumer spending patterns and has the
greatest impact on monthly comparable sales. Typically, the
annual impact is minimal, with the exception of leap years.
• System wide sales include sales at all restaurants, whether
operated by the Company, by franchisees or by affiliates. While
sales by franchisees and affiliates are not recorded as revenues by
the Company, management believes the information is important
in understanding the Company’s financial performance because it
is the basis on which the Company calculates and records
franchised and affiliated revenues and is indicative of the
financial health of our franchisee base.
METHDOLOGY
This project is prepared with the help of

theoretical knowledge as well as practical
52
knowledge & a crumb of advises & suggestions

from the concerned professors.
The theoretical pert taken from the various

books & magazines available on this subject. And
other recent happing in marketing is taken from
magazines & news paper.
As far as practical is concerned, all the
information about the companies information
available on net.
Overall this mission has been completed with the

combination of al those things & it had been with
the best of my facts & information.
BIBLOGRAPHY
53
• BOOKS:-
 BRAND PRACTICES.
• MAZINES:-
 BUSINESS WORLD.
 100 TOP BRANDS.
 THE VALUABLE BRANDS OF INDIA.
• WEB SITES:-
 www.mcdonaldsindia.com
 www.mcdonalds.com
CONCLUSION…………
54
TODAY, MCDONALDS HAS

GROWN TO 25,000 RESTAURANTS IN
ABOUT 120 COUNTRIES SERVING 50
MILLION CUSTOMERS DAILY.
BECOMING THE LARGEST FAST FOOD
CHAIN IN ALL OVER THE WORLD………
55
56
B
57
58
59

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“One world, One

I HAVE GREAT PLEASURE IN PRESENTING MY PROJECT

I WOULD LIKE TO THANK MY PROJECT GUIDES, ALL

LAST BUT NOT THE LEAST I WOULD LIKE TO EXPRESS MY

WE STUDENTS OF BIRLA COLLEGE, STUDENT OF

Although the realm of accounting and finance has

McDonald’s Restaurants UK Limited, a wholly owned

7% of global profits, making the UK a very important financial

McDonald’s understands the value of an integrated

DEPARTMENT STRUCTURE & FUNCTION

McDonald’s Finance Department has two key areas of

HOW DOES MCDONALD’S MAKE A PROFIT?

McDonald’s has two sources of profit:

McDonald’s retains all of the profit earned by company-owned

McDonalds is a leader in convenient foods and

McDonalds’s success is the result of superior products,

Our mission is to be the world's premier consumer

we operate. And in everything we do, we strive for honesty,

variety and quality choices surprise and delight customers with

McDonald’s corp. is currently one of the most successful

McDonald’s products are recognized and are most respected all

McDonald’s believes their success depends upon the quality

The McDonald's History - 1954 to 1955

Ray Kroc had never seen so many people

"Well," Kroc answered, "what about me?"

Where it all began, Des Plaines, Illinois

Ray Kroc opened the Des Plaines restaurant

The McDonald's History - 1956 to 1963

Ray Kroc At Work

"If you've got time to lean, you've got time to clean,"

Ronald McDonald, In Any Language He Means "Fun!"

"The smile known around the world," In his first TV

Fred Turner And Ray Kroc, Architects Of A Dream

The McDonald's History - 1965 to 1973

McDonald's Comes To Wall Street

In 1965 McDonald's went public with the company's first

A Big Idea Called "Big Mac"

"Introduced systemwide in 1968, the Big Mac was the

The Egg McMuffin

Introduced in 1973, the Egg McMuffin was developed

The First Ronald McDonald House in Philadelphia, PA

In 1974 Fred Hill of the Philadelphia Eagles teamed up

The Happy Meal

The Future Begins Now

McDonald's Express for a world that can't slow

FACTS & FIGURES

McDonald’s is one of the leading restaurant chains in

stand, but after establishing the restaurant they served around 25

As per the information of the McDonald’s history, the

The business began in 1940, with a restaurant opened

"Speedee." Speedee was eventually replaced with Ronald

The present corporation dates its founding to the opening

With the expansion of McDonald's into many international

MCDONALD'S India Pvt Ltd (MIPL), the wholly-owned

Corporation, is likely to put on hold its earlier declared expansion

79 restaurants in North & East India: with

• 22 in Uttar Pradesh – Noida (5),

• 11 in Haryana - Faridabad (3), Manesar (1) (Highway and Drive -

53 Restaurants in West & South India:

32 in Maharashtra – Mumbai (23), Pune (8), Nasik (1)

• 7 in Gujarat – Ahmedabad (4), Vadodara (2), Surat (1)

The first disabled friendly store at Noida (UP)

The first annual fundraiser in association with ORBIS and Dr.