Review of Financial Statements Essay

pecuniary directions ar indispensable accounting system tools which include balance sheets, currency flow financial statements, and income statements that provide selective information on a companionships past and present monetary history. Information on financial statements female genital organ be utilisationd by any number of man and private entities to determine if an organizations financial status is healthy. Burger magnate and McDonalds are ii organizations that use financial statements in conducting line of business.Further, this piece will discuss the financial statements of to each one company, the firms which audit each companies financial statements, and define accounting concepts, terminologies, and transactions utilise in the financial statements. Additional information will provided regarding when McDonalds and Burger female monarch were established and what product and work they provide to the unexclusive.Overview of OrganizationsMcDonalds first o pened its doors in 1940 introducing the concept of the fixednessee service system offering french french heat, burgers, and shakes to satisfy the famished customer quickly at a low price. Over the adjoining 65 plus years the McDonalds carte du jour has changed from just french fries and hamburgers to salads, wraps, chicken nuggets and many much items which cater to the ever ever-changing tastes of consumers. McDonalds has been criticized oer the years as being a major contributor luxuriously obesity rates, in part due to the speedee service concept. These criticism devour caused McDonalds to rethink menu items and benefactored the company to enact numerous changes to the menu which now offers nutritional guides for each menu item and healthier choices such(prenominal) as salads, fruit, and milk.McDonalds has changed the oil used to fry foods to make the fries healthier and includes a choice of meal sizes and most recently started a new line of coffee drinks, which offers the desired Starbucks taste for a piece of the cost. The fast food chain currently has 31,000 restaurants worldwide and operates in 119 countries and serves most 47 cardinal customers daily. McDonalds is a exchangeable higher(prenominal)ly associated with the Ronald McDonald House Charities (RMHC) that has donated money and services to families and communities for over 35 years to approximately 37 meg children and families. (McDonalds, 2009). The McDonald jackpot pays for most of RMHCs global administration cost so that every last(predicate) donations go directly to the federation and families. The charity is in such high demand that RMHC plans to expand their programs by 37% by 2010 to better help those in need.Burger baron started in 1953 first known as Insta Burger faggot offering hamburgers to consumers that was cooked on a fiddling cooker c eached an Insta-Broiler oven the concept proved to be successful. In 1954 the name changed to Burger queer, the broiler o ven first used was replaced with the flame broiler and soon became fashionable for offering their flame broiled hamburgers and what is now known as the walloper burger. (Burger business leader, 2009). The next 60 plus years for Burger power began suffering the like criticisms as McDonalds.It seemed all fast food chains were being charge for the increase obesity rate in the U.S. Burger King followed suit and began make changes to their menus adding chicken, salads, fruit, food nutritional guides, smaller sizes, choice of drinks such as tea, milk, and changing the oil used to fry French fries as head as additional changes. Burger King skunk is associated with a few charity organizations such as Have It Your Way which works to alleviate hunger, disease, and promotes community education through scholarship programs the McLamore Foundation provides scholarships and is associated with several charities forWhen Organizations Were EstablishedBurger King was represented in 1954 in Miami, Florida by James McLamore and David Edgerton. McLamore and Edgerton, both of whom had extensive lie with in the restaurant business before starting their joint venture, believed in the simple concept of providing the customer with reasonably priced quality food, served quickly in attractive, clean surroundings. (New York Job Source, 2009), thus, the invention of the Whopper which was an instant success. at present Burger is found in all 50 states and 74 countries and territories passim the world with more than 11,700 restaurants. In 1967 the Pillsbury association based in Minneapolis, Minnesota purchased the company and its employees and the company went public in May 2006 at $17 a share. Today the company remains majority-owned by an equity group comprised of Texas Pacific Group, Bain roof Partners and the Goldman Sachs Funds. (New York Job Source, 2009).McDonalds was founded by two brothers, Dick and Mac McDonald of San Bernardino, California. prick Kroc, a milksh ake machine distributor happened on the brothers restaurant as he was curious to discover why such a small establishment would need 10 milkshake machines. Kroc was impressed by the speed with which these two brothers were able to provide service in their busy hamburger stand and he asked the brothers for a briefing on their McDonalds Speedee governance and after the briefing he requested and secured the rights to duplicate the system throughout the United States. Ray Kroc opened his first outlet in kale in 1955, 50 years later the number of McDonalds locations had expand to over 31,500. (Albrecht, Stice, Stice, & adenine Swain, 2008, pg. 76). Today McDonalds averages over 100 jillion dollars a day and is primed(p) in 121 countries around the world. Both companies had spare beginnings and have grown into fast food superstars. chronicle Organizations Providing AuditsBoth McDonalds and Burger King offer burgers, fries, and creamy shakes. However, the differences among McDonalds a nd Burger King are far more than golden arches and golden crowns. McDonalds has both and inhering and external audit commissionings. The infixed audit committee is composed of vanadium Directors, each of whom meets the independence and other requirements of the New York Stock Exchange (Santona, 2009). The committee abides by a charter which states all its responsibilities and is reviewed one-yearly. Ernst & Young LLP (Ernst & Young), the Companys independent auditors, is responsible for performing an audit of the Companys annual consolidated financial statements in accordance with mostly accepted accounting principles (GAAP) and for issuing a trace on those statements (Santona, 2009).The Burger King Corporation also has both internal and external audit committees. The internal committees perform quarterly internal audits that are published for investors, but these audits are indicated as unaudited by an external entity. KPMG LLP is the external organization the Burger K ing Corporation uses for its external audits.fiscal Statements Used and TerminologyAs a publicly traded company within the United States Burger King Corporation (BKC) has effectn all the necessary steps required to abide by the regulations set ahead the Sarbanes-Oxley Act of 2002. The annual report for FY2008 includes information such as business information, risk factors, physical assets, legal proceedings, stockholder matters, and finally a blanket(prenominal) financial statement. (Burger King Corp, 2009). This section of the annual report begins with counselling reports on internal controls which are in place regarding financial reporting which explains in detail the understanding of both the CEO and CFO and their obligation to take full responsibility for the content of the annual report. The report of the independent registered public accounting firm (KPMG) is and additional statement of responsibility from the independent accounting firm which states the firm has revie wed the information. Paged within the reportcontain the balance sheet, statement of income, statement of stockholders equity, and statement of cash flows for FY2008 compared to 2007, 2006, and 2005.While BKCs annual report was presented in a standard no-frills format, McDonalds Corporations 2008 annual report included graphics and photos as the driver of the information. Along with the financial statements, McDonalds annual report focused on highlights from the menu to the money along with letters of welcome from the Chairman, Andy McKenna and CEO, Jim Skinner. (McDonalds Corporation, 2009). The financial reporting still included the managements report on internal controls, the report of independent registered public accounting firm (Ernst & Young, LLP), the balance sheet, statement of income, statement of stockholders equity, and the statement of cash flows. In both instances a dedicated effort was make to satisfy the requirements regulated by the United States Securities and Ex change Commission.Basic Accounting ConceptsIn 2008, McDonalds financial report shows annual total taxation at 23,522.4 million dollars compared to Burger Kings 2,455.0 million dollars a difference of 21,067.4 million dollars McDonalds clearly having earned more revenue (MSN Money, 2009). However, prior to 2003, the difference between McDonalds acquires and Burger Kings were even greater. From 2001 through 2003 Burger King was losing money, but has made a steady annual gross bring in since. (CNN Money, 2006).TransactionsIn 2008, Burger Kings annual profit was 1,452.0 million dollars and in 2007 the profit was 1,317.0 million dollars, a growth of 135 million dollars. McDonalds has also encountered gross profit over the past two years, however, at a much greater scale. In 2008 the gross profit recorded was 8,639.2 million dollars and in 2007 a gross profit was recorded of 7,905.2, an increase in profit of 734 million dollars.Accounts Affected by TransactionsWhile the two fast food r estaurant chains are no where closemouthed comparable in revenue, both chains are increasing revenue year after year. Since 2006, when Burger King became a publicly traded company like McDonalds, they both worked to maintain a profitable growth for share holders which has increased the amount of profit each year (MSN Money, 2009). Both companies have cash assets as well as land and property, rental fees, food, supplies, salary responsibilities, and advertising. Financial Statements Affected by TransactionsEach of the transactions listed for Burger King and McDonalds are provided in detail on a number of the financial statements. Specifically, the profit can be followed on the balance sheet, the statement of income, and the statement of cash flows located in each annual report. In addition these figures are compared to the front years numbers on each of these statements.ConclusionMcDonalds and Burger King have been in business for decades and each company has established its vario us(prenominal) company in the hearts of the American people and consumers across the existence when they expanded into global market. Both companies use reputable accounting firms and the very(prenominal) types of financial statements in order to assess the health of their financial status. This paper has shown how important understanding the concepts, terms, and transactions listed on financial statements are in order to better gauge how a company is faring financially on a year to year basis.ReferencesAlbrecht, W.S., Stice, E.K., Stice, J.D. & Swain, M.R. (2008). Accounting Concepts and applications, (10 ed). Cengage Learning Center, Mason, Ohio.Burger King Corp. (2009). Company Info. Retrieved June 20, 2009 http//www.bk.com/Companyinfo/corporation/fact.aspxCNN Money. (2006). The King Meets his Public. Retrieved June 18, 2009, from http//money.cnn.com/magazines/fortune/fortune_archive/2006/03/06/8370602/index.htmMcDonalds. (2009). Our company. Retrieved June 18, 2009 from htt p//www.aboutmcdonalds.Com/mcd/our_company.htmlMcDonalds Corporation (2009). 2008 annual report. Retrieved June 18, 2009, from http//www1.mcdonalds.com/annualreport/index.htmlMSN Money. (2009). McDonalds Corporation Financial Statement. Retrieved June 18, 2009,from http//moneycentral.msn.com/investor/invsub/results/statement.aspx?Symbol=MCD&1stStatement=Income&stmntView=AnnMSN Money. (2009). Burger King Holdings Inc. Financial Statement Retrieved June 18, 2009, from http//moneycentral.msn.com/investor/invsub/results/statement.aspx?Symbol =BKC&1stStatement=Income&stmntView=AnnNew York Job Source. (2009). Burger King knowledge domains second largest food chain. Retrieved June 19, 2009 from http//www.nyjobsource.com/burgerking.htmlSantona, G. (2009). McDonalds 2009 Annual Shareholders Meeting and proxy Statement. Retrieved June 20, 2009, from http//www.aboutmcdonalds.com/etc/medialib/aboutMcDonaldsinvestor_relations.Par.58.686.File.tmp/2009%20Annual%Shareholders%20Meeting%2 0Proxy%20Statement.pdf