Sales forecast

Revenues of McDonalds consist of company-operated sales and revenues from

franchised restaurants including rent and royalties based on a percent of sales.
According to the consolidated operating income statement of the year 2009, 2008 and
2007, the sales by company-operated restaurants fell by 7% from 2008 to 2009 but
remained relatively the same from 2007 to 2008 while the revenues from franchised
restaurants rose by 5% from 2008 to 2009 and by 13% from 2007 to 2008
( McDonalds Corporation, 2009). It implies that some company-operated sales
shifted to franchised sales in the past two years due to the re-franchise strategy, which
led to a decrease in consolidated revenues because the company could only receive a
certain percentage of the franchised restaurants sales as income.
For 2010, McDonalds re-imaged itself, leveraged technology, improved services and
planned to aggressively open about 600 new restaurants in three years in China
(McDonalds Corporation, 2009) which has a huge market potential.
It is expected that the sales by both the company-operated restaurants and franchised
restaurants would increase in 2010 due to a more optimistic economic outlook as well
as the strategies mentioned above.
On the other hand, the cost of goods sold would also be expected to increase because
of inflation, the global inflation rate was 3.7% in 2010 (Proper role, 2010).
However, because McDonalds adopts bulk purchases, the impact of inflation may not

be huge. The increase in sales volume would lead to a rise in total cost of goods sold
and the inflation would add a slight increase to it as well.
Budgeted sales by company-operated restaurants in 2010: $15459x1.05=$16232
Budgeted revenues from franchised restaurants in 2010: $7286x1.1=$8015
Budgeted company-operated restaurant expenses in 2010: $12651x1.03=$13031
Budgeted franchised restaurants expenses in 2010: $1302x1.08=$1406
References
McDonalds Corporation. (2010). McDonalds Corporation Annual Report 2009.
Proper role of the central bank. (2010, December 5). Retrieved March 31, 2011, from
http://www.thedailystar.net/newDesign/news-details.php?nid=164755