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Review of Financial Statements EssayFinancial dictations are essential accounting tools which include balance sheets, cash flow statements, and income statements that declare oneself information on a companys past and present pecuniary history. Information on financial statements can be employ by any design of public and private entities to determine if an organizations financial status is healthy. Burger pouf and McDonalds are two organizations that use financial statements in conducting business.Further, this paper will discuss the financial statements of all(prenominal) company, the hards which examine to for each one one companies financial statements, and define accounting concepts, terminologies, and transactions used in the financial statements. Additional information will provided regarding when McDonalds and Burger nance were realised and what product and services they provide to the public.Overview of OrganizationsMcDonalds first opened its doors in 1940 introducing the concept of the speedee service system offering french fries, hamburgers, and shakes to satisfy the hungry customer promptly at a low price. Over the next 65 plus years the McDonalds menu has changed from just french fries and hamburgers to salads, wraps, chicken nuggets and many to a greater extent items which cater to the ever changing tastes of consumers. McDonalds has been criticized over the years as being a major contributor high obesity rates, in part out-of-pocket to the speedee service concept. These criticism prevail caused McDonalds to rethink menu items and helped the company to enact numerous changes to the menu which now offers nutritional guides for each menu item and fitter 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 impudent line of coffee drinks, which offers the desired Starbucks taste for a fraction of the cost. The fast food chain currently has 31,000 restaurants humannesswide and operates in 119 countries and serves approximately 47 jillion customers daily. McDonalds is in addition highly 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 million children and families. (McDonalds, 2009). The McDonald Corporation pays for most ofRMHCs global institution cost so that all donations go directly to the community 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 King started in 1953 first known as Insta Burger King offering hamburgers to consumers that was cooked on a small cooker called an Insta-Broiler oven the concept proven to be successful. In 1954 the name changed to Burger King, the broiler oven first used was replaced with the flame broiler and soon became popular for off ering their flame broiled hamburgers and what is now known as the walloper burger. (Burger King, 2009). The next 60 plus years for Burger King began suffering the same criticisms as McDonalds.It seemed all fast food arrange were being blamed for the increase obesity rate in the U.S. Burger King followed suit and began making 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 well as additional changes. Burger King Corporation is associated with a few charity organizations such as dedicate It Your Way which works to alleviate hunger, disease, and promotes community education through scholarship programs the McLa more Foundation provides scholarships and is associated with several charities forWhen Organizations Were EstablishedBurger King was founded in 1954 in Miami, Florida by crowd McLamore and David Edgerton. McLamore and Edgerton, both of whom had e xtensive experience in the restaurant business before starting their joint venture, believed in the simple concept of providing the customer with reasonably priced forest 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 throughout the world with more than 11,700 restaurants. In 1967 the Pillsbury confederation 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 Capital Partners and the Goldman Sachs Funds. (New York Job Source, 2009).McDonalds was founded by two brothers, Dick and Mac McDonald of SanBernardino, California. Ray Kroc, a tremble machine distributor happened on the brothers restaurant as he was curious to discover why s uch 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 apprize on their McDonalds Speedee System 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 Chicago in 1955, 50 years later the number of McDonalds locations had expanded to over 31,500. (Albrecht, Stice, Stice, Swain, 2008, pg. 76). Today McDonalds averages over 100 million dollars a day and is hardened in 121 countries around the world. Both companies had meager beginnings and have grown into fast food superstars.Accounting Organizations Providing AuditsBoth McDonalds and Burger King offer burgers, fries, and creamy shakes. However, the differences between McDonalds and Burger King are far more than golden arches and golden crowns. McDonalds has both and internal and ext ernal audit committees. The internal audit committee is composed of five 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 yearbookly. 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 generally accepted accounting principles (GAAP) and for issuing a report 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 King Corporation uses for its external audits.Financial Statements Used and TerminologyAs a publicly traded company within the United States Burger King Corporation (BKC) has shrinkn all the necessary steps required to abide by the regulations set forth the Sarbanes-Oxley Actof 2002. The annual report for FY2008 includes information such as business information, risk factors, physical assets, legal proceedings, stockholder matters, and finally a comprehensive financial statement. (Burger King Corp, 2009). This section of the annual report begins with circumspection reports on internal controls which are in place regarding financial reporting which explains in incident 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 reviewed 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 earn 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 made to satisfy the requirements regulated by the United States Securities and Exchange Commission. staple fiber Accounting ConceptsIn 2008, McDonalds financial report shows annual total revenue at 23,522.4 millio n 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 get aheads and Burger Kings were even greater. From 2001 through 2003 Burger King was losing money, but has made a steady annual make realize 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 restaurant chains are no where near comparable in revenue, both chains are increasing revenue year after year. Since 2006, whe n 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 previous years numbers on each of these statements.ConclusionMcDonalds and Burger King have been in business for decades and each company has established its respective company in the hearts of the American people and consumers across the globe when they expanded into global market. Both compani es use respectable accounting firms and the same 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 http//www.aboutmcdonalds.Com/mcd/our_company.htmlMcDonalds Corporation (2009). 2008 annual report. Retrieved June 18, 2009, from http//www1.mcdonalds.com/annualrepo rt/index.htmlMSN Money. (2009). McDonalds Corporation Financial Statement. Retrieved June 18, 2009,from http//moneycentral.msn.com/investor/invsub/results/statement.aspx?Symbol=MCD1stStatement=IncomestmntView=AnnMSN Money. (2009). Burger King Holdings Inc. Financial Statement Retrieved June 18, 2009, from http//moneycentral.msn.com/investor/invsub/results/statement.aspx?Symbol =BKC1stStatement=IncomestmntView=AnnNew York Job Source. (2009). Burger King Worlds assist 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%20Proxy%20Statement.pdf