McDonald's Corp (NYSE:MCD) Earnings Model
McDonald's Modeling Approach
Revenue Modeling Approach: This model breaks-down McDonald’s results into Company Operated and Franchised Restaurants. We estimate the number of each type of restaurant and apply an estimate of Revenue per restaurant to determine future revenue.
Expense Modeling Approach: We use operating margin estimates for each restaurant type to back into the four primary operating expense line items.
We use historic averages to estimate Interest & Non-Operating Income, and apply an effective tax rate to the future projected income to forecast the Provision for Income Tax.
Share Count Forecast: To forecast the future share count we calculate the historic change in share count, after removing the impact of share repurchases. We then make estimates for future share repurchase volume and prices, and deduct the resulting share reduction in our forecast periods.
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