What does debt-to-equity mean?

How much debt the company carries for every dollar of shareholder equity.

How do you interpret debt-to-equity?

Lower is generally safer, but moderate leverage can boost returns. Read in the context of cash-flow stability — a utility tolerates more debt than a cyclical. Negative equity makes the ratio meaningless and it is suppressed there.

How does debt-to-equity compare across companies?

Comparable within an industry; capital structures differ sharply across sectors. Not meaningful for banks.

McDonald's MCD Debt-to-equity

Discontinued — last reported Q1 '18

Debt-to-equity at other companies

Chipotle Mexican GrillCMG

2.2×+0.9×

Restaurant Brands InternationalQSR

4.2×-0.9×

Other financials

Income statement

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Revenue$6.5B+9.4%

Gross profit$5.8B+9.5%

Operating income$3.0B+11.5%

Net income$2.0B+6.2%

EPS (diluted)$2.78+6.9%

Balance sheet

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Cash & equivalents$1.2B-5.5%

Total debt$54.9B+4.0%

Total equity-$1.3B+62.8%

Total assets$60.0B+6.6%

Cash flow

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Operating cash flow$2.4B-0.7%

CapEx$682.0M+23.8%

Free cash flow$1.7B-7.8%

Valuation

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Market cap$201.66B-0.8%

Enterprise value$255.37B+0.1%

P/E23.2×-1.7×

P/S7.4×-0.6×

Profitability

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Gross margin86.6%—

Operating margin46.3%+1.0pp

Net margin31.6%-0.1pp

Returns & leverage

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Return on equity45.4%—

Current ratio1.1×0.0×

Where this comes from

Calculated from McDonald's’s reported figures.

total debt/total stockholders equity=6.5×

Based on the most recent quarter.

The official record: McDonald's’s 10-Q, filed August 6, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does debt-to-equity mean?: How much debt the company carries for every dollar of shareholder equity.
How do you interpret debt-to-equity?: Lower is generally safer, but moderate leverage can boost returns. Read in the context of cash-flow stability — a utility tolerates more debt than a cyclical. Negative equity makes the ratio meaningless and it is suppressed there.
How does debt-to-equity compare across companies?: Comparable within an industry; capital structures differ sharply across sectors. Not meaningful for banks.