McDonald's - Comparative Multiple Analysis

McDonald's (Comparative Multiple Analysis)

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Improve your investment analysis with by seeing the McDonald's's Discounted Cash Flow analysis, McDonald's's Warren Buffet analysis, and McDonald's's Weighted Average Cost of Capital (WACC) Analysis.

Notes on the Comparative Multiple Analysis of McDonald's

WikiWealth compares McDonald's's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with McDonald's's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for McDonald's.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to McDonald's's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for McDonald's's Analysis


How does this work? The Comparative Investment Analysis determines the value of McDonald's by comparing McDonald's financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of McDonald's.

See the McDonald's cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in McDonald's.

Also, see the McDonald's's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and McDonald's's valuation conclusion for a quick summary.