This paper is going to focus on three selected public companies: Mac Donald, Starbucks and American International group.
Looking at McDonald’s balance sheet for the year 2005 we can be able to ascertain its financial position for the period ending 31st December 2005. The total current assets for McDonald in the year 2005 were US $ 6219.0 million. On the other hand its total current liabilities for the same period were US $ 4107.7 million. Converting the current assets into cash they were able to pay off the current liabilities and still US $ 2111.3 million remained (Finance Maps of World.com 2009). At the end of 2005 therefore, the business was in good shape for it was able to pay off its current liabilities. For the year ending 31st Dec 2006 the total current assets converted into cash were US $3625.3 million. The total current liabilities for the same period were US $ 13565.5million. After converting the total current assets into cash and paying off its current liabilities the McDonald’s accrued a deficit of US $ 9940.2million. For the year ending 31 December 2006 the business was not in a good shape for it made a deficit after paying off its current liabilities. For the year 2007 the total current assets were US $ 3581.90million. The total current liabilities for the same year were US $ 4498.50million. For the year ending Dec 2007 the total current assets converted into cash were not able to pay off the total current liabilities for the company made a deficit of US $ 916.6million (Google Finance 2009). Therefore the firm was not in a good shape.
Looking at financial statement for Starbucks corp. for the period ending September 2005 the total current assets were US $ 1209.33million. The total current liabilities were US $ 1227.00million. During this period, after converting the current assets into cash the company was not able to pay off its current liabilities for the firm made a deficit of US $ 17.67million. In the 2005 period star bucks was not in a good shape. The total current assets for the period ending September 2006 increased to US $ 1529.79 from the previous figure of US $ 1209.33 for 2005. Similarly the total current liabilities increased to US $ 1935.62. In this period the company made a deficit of US $ 405.83million. After converting the total current assets into cash the company was not able to pay off its current liabilities. Star bucks was therefore not in a good shape for the period ending September 2007. The total current assets for the period ending September 2006 were US $ 1696.50. The total current liabilities for the same period were US $ 2155.60. After converting the total current assets into cash they were not able to pay off the current liabilities for the same period for the firm made deficit of US $ 459.Million.(MarketWatch 2009) The company was therefore not in a good shape for it made deficit.
American International, Inc (AIG) in the period ending December 2005 the total current assets were US $ 853, 370 000. The total current assets for the same period was US $ 767,053, 000. Converting the current assets into cash AIG was able to pay off its current liabilities; for there was a surplus of US $ 86317000. In the period ending December 2006 the company’s total current assets were US $ 979,414,000. On the other hand the total current liabilities for the same period was US $ 877, 737,000. In this period the firm was in a good shape for after converting its current assets into cash the firm was able to pay off its current liabilities and remained with a surplus of US $ 101,677,000. For the period ending December 2007 the total current assets for the firm were US $ 1,060,505,000. The total current liabilities for the same period were US $ 964,704,000. (Yahoo Finance2009). During this period after converting assets into cash the company was able to pay off its liabilities and remained with a surplus of US $ 83801000. This shows that for the period ending December 2007 the company was in a good shape.
Looking at McDonald’s cash flow for the year 2005; cash from investing activities was US $ -1,817.80 million. For the year 2006 Cash from investing activities for this company was US $ -1,274.1million. Cash from investing activities for the year 2007 was US $ -1,150.1million. (Msn 2009). Total non current assets for MacDonald’s for the period ending Dec 2005 was US $23,769.80 million; for the year 2006 it was US $ 23,782.30 million; and for the year ending Dec 2007 it was US $ 25,809.80 million. (MarketWatch 2009). From this trend therefore, it can be noticed that the company was recording an increase in its investment operations although by smaller margins.
Starbuck’s cash flow for the period ending December 2005 shows that total cash from investing activities for that period was US $ 220,615 million. For the following period of the year 2006 total cash from investing activities was US $ 841,040 million. For the year 2007 total cash from investing activities was US $ 1,201,951 million.(educated finance 2009). Total non current assets for the year 2005 for star bucks were US $ 2,899.15 million. For the following year 2006 total non current assets were US $ 3,647.40 million. For 2007 total non current assets were US $ 3,924.60 million.( MarketWatch 2009). From these figures the company was increasing in its investment activities and was doing better than McDonald for that given three year period.
For the year ending 31st December 2005 AIG in its cash flow statement recorded US $ 57,321,000 from its investing activities. For the following year 2006 the firm recorded US $ 67,040,000 in its investment activities. In the year 2006 it recorded a figure of US $ 68,007,000 in its investing activities. (Yahoo Finance Canada 2009). Total non current assets for the year 2005 were US $ 853,370,000; for 2006 non current assets amounted to US $ 979,414,000 ; For 2007 non current assets amounted US $ 1,060,505,000.( Yahoo Finance 2009). From the figures AIG recorded an increase in its investment activities from the year 2005 – 2007.
For McDonald the net incomes for 2005-2007 were; US $ 2,602.2 million, US $ 3,544.2 million and US $ 2,395.1 million respectively. (Msn 2009). On the other hand, net cash from operating activities for 2005-2007 were; US $4,336.80 million, US $4,341.50million and US $ 4,876.30 million respectively. In 2005 -2007 Starbucks recorded a net income of; US $ 494.37million, US $ 564.26 million and US $ 672.64 million respectively.( Msn 2009). On the other hand net cash from its operating activities from 2005-2007 were US $ 922.92 million, US $ 1,131.63 million and US $ 1,331.22 million respectively.(Msn 2009).AIG made a net income of; US $ 10,477,000 in 2005 and a net income of US $ 14,048,000 in 2006 and in 2007 it was US $ 6,200,000.Net cash from operating activities from 2005 -2007 were; US $ 25,138,000, US $ 6,829,000 and US $ 35,171,000 respectively.(Yahoo Finance 2009).
References
Educated finance 2009 Starbucks. Web.
Finance Maps of World.com 2009 McDonalds Financial Statement. Web.
Google Finance 2009 McDonald’s Corporation. Web.
MarketWatch. 2009. Annual Financials for McDonald’s Corporation. Web.
MarketWatch 2009 Annual Financials for Starbucks Corp. Web.
Msn 2009McDonald’s Corp: Financial Statement. Web.
MarketWatch. 2009. Annual Financials for Starbucks Corp. Web.
N. Madison 2009 What are Financial Statements? Wise Geek. Web.
Yahoo Finance.2009. American International Group, Inc. (AIG). Web.