McDonalds vs Wendys - Financial Superiority?
In the time that we currently live in, fast food chains are some of the biggest and most widely known industries in the world, but the question that not many people could answer is, "which company is the biggest?" Almost any cultured person could name a couple of fast food chains, and most likely two of them would be McDonald's and Wendy's, the two companies that I will compare in this essay. It is difficult to distinguish which company would be considered superior because there are many aspects that have to be factored in, in order to make this decision. Earnings per share, current ratio, debt/equity, price/earnings ratio and dividend yield all need to be thought out to get an idea of which is better. Earnings per share are the amount of money one gets for having a single share. The higher the earnings per share, the better it is, because the profit is bigger for the stocks that one owns. McDonald's earnings per share are only $0.17, whereas Wendy's are $0.68. This is likely because even though McDonald's earns far more money a year, they also have a larger number of stockholders. This means that each McDonald's stockholder gets paid less from the larger profit of the two companies. In the article, it mentions that Wendy's is a
The McDonalds article clearly shows that their debt is too high. The article regarding McDonald's shows that the earnings per share is very low, and therefore needs to publicize that they are doing better. The Wendy's article states that the rising income of the restaurants is increasing prominently, and their debt is increasing very little. Despite having the huge profits, their liabilities are just too high and therefore the company loses money. The Wendy's article shows that the company is expanding and earning more money because the stock earnings are rising. The rising stock creates an increase in the return that each stockholder receives. The current ratio for McDonald's is 1. The McDonald's article does not deal directly with the price/earnings ratio, but we can detect that the ratio is lower because the price per share is so much lower and the earnings are decreasing as well. The dividend yield shows the percent of the amount a consumer paid for a stock, that they receive in interest over a period of time. But for the time being, McDonald's is the king of fast food. The debt equity ratio shows the amount of money that a company owes, or its liabilities, in comparison to the amount of money the stockholders receive.
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