For the two companies you have chosen, using 2 or 3 years of data: McDonald’s and
Wendys !
1) Describe each company business. Using Porter’s model, describe each company’s competitive
advantages.
2) Compute RNOA and ROE
3) Decompose RNOA into asset turnover and margin
4) Decompose ROE into operating and non-operating return
5) Decompose non-operating return into leverage and spread
6) Decompose ROE using DuPont’s formula
7) Importantly, discuss and evaluate your firms’ profitability in absolute terms and relative to each
other.
Instructions:
Instructions:
Open a tab in Excel. Call it profitability. Input, in columns, the raw data used to compute the
ratios. Clearly identify the ratios computed above. Add a column called “Notes”. Clearly
explain how you computed the ratios. Points will be taken off if the explanations are not
clear to me
For the two companies you have chosen, using 2 or 3 years of data: McDonald’s an
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