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Financial Performance Analysis of Citigroup, Inc. and McDonald's Corporation

Evaluate Citigroup, Inc.'s 2007 financial data including profit margin and ROE. Calculate McDonald's Corporation's current value based on profit expectations and discount rate. Learn about factors influencing firm valuation.

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Financial Performance Analysis of Citigroup, Inc. and McDonald's Corporation

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  1. DRQ #1AGEC 317 5pts September 3, 2013 • Citigroup, Inc. in 2007 had sales revenue of $96.431 billion, business profits of $21.185 billion, and a net worth of $118.856 billion. (½ pt) (a) What was the profit margin for Citigroup, Inc in 2007? (½ pt) (b) What was the ROE for Citigroup, Inc in 2007? (½ pt) (c) Interpret the ROE figure obtained in (b). • (1pt) Suppose that McDonald’s Corporation anticipates profits to be $4 billion in 2013 and $5 billion in 2014. Calculate the value of McDonald’s Corporation today. Assume the discount rate is four percent. • (1pt) (a) Besides the discount rate, what two factors are involved in the calculation of the value of any firm? (½ pt) (b) The discount rate is a measure of to the firm. • (1pt) Suppose that + . Solve for and .

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