Why does mcdonalds use constant currency

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Reference no: EM131288499

McDonald's
McDonald's Corporation (McDonald's) (www.mcdonalds.com) is the world's largest food service retailing chain. The company is known for its burgers and fries which it sells through 31,000 fast-food restaurants in over 119 countries. The video case explores the challenges which McDonald's may face in consolidating revenues and other financial information from operations in multiple countries. It also looks at recognizing how differing laws and monetary systems can affect the accounting activities of a global corporation.

Questions

1. Why does McDonald's use ‘constant currency' comparisons when reporting its financial results?

2. What effect do the corporate income tax rates in the countries where McDonald's operates have on the income statements prepared in local offices?

3. What problems might arise if individual McDonald's restaurants were required to enter sales data directly onto the company's centralized accounting website, instead of following the current procedure of sending it through country and regional channels?

4. To help investors and analysts better assess the company's worldwide financial health, should McDonald's be required to disclose detailed financial results for every country and region? Support your chosen position.

Reference no: EM131288499

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