Download financial statement data for Domino Pizza & McDonalds (6 most recent fiscal years from www.sec.gov; go to Filings -> Company Filings Search-> search for each company under “Company and Person lookup”-> look for 10-Ks (annual reports and 10Q quarterly reports) under selected filings then click “view all 10-Ks and 10-Qs” , next scroll down and find 10-Ks. Click “Fillings” next to the corresponding 10-K, then click “Interactive Data” and download appropriate financial statement data (6 fiscal years for both DPZ & MCD which you will use for calculating debt to equity ratio, debt ratio and interest coverage ratio. By clicking on “View Excel Document” once you will choose appropriate financial statement, you will be able to download that statement in Excel file. Do the same for both companies and put all data (6 fiscal years for each company) in one Excel file.
Then compute:
1. interest coverage (debt to equity ratio & debt ratio)
2. and leverage ratios (interest coverage ratio) for both DPZ & MCD
– For each company (6 fiscal years) put ratios in a summary table. Use Excel for calculations to show formulas of your calculated 3 ratios under your downloaded data for for 6 fiscal years.
– Based on these ratios, assess the credit quality of each company. Address whether the credit quality of each company changed over the five-year period and whether one company’s credit quality has been consistently better than the other company’s on a year-by-year basis.
For your both companies, download from Moodys.com (register for free), the credit ratings for long-term debt for your two companies for the past six years.
– Are the Moodys credit ratings for the past five years consistent with your analysis of credit quality? If not, give specific reasons why the Moody’s ratings might suggest different conclusions than what your analysis of credit quality suggested.