McDonald’s UK subsidiary has Egg McMuffin on its face today, after revealing it had overstated its 2013 turnover by £132m. In accounts filed at Companies House, the firm was forced to admit it had missed a decimal point when putting together its 2013 results, which led to it reporting £1,498m in revenues, when actually the figure was £1,365m.
There’s no question of duplicity here – by all accounts it was a genuine mistake, and the error had no impact on profits. Nonetheless, it is rather embarrassing. A stray decimal point may not be much between friends, but it is between accountants.
Company accounts get checked to death before they see the light of day, and for a company of this scale such an error is rare to say the least. It’s the equivalent of a newspaper or magazine printing a typo on their front page (here’s looking at you, Daily Express).
Still, as UBS boss Sergio Ermotti said recently, everyone makes mistakes. Indeed, this one has an upside. After restating its 2013 revenues, McDonald’s can now say its sales increased in 2014 (to £1,433m), which wouldn’t have been true if the error had been missed. Operating profit still fell 8% to £213.4m, but at least it’s doing better here than it is in the States.
Brit Steve Easterbrook, group chief executive, might wish at least one of McDonald’s seven consecutive quarterly falls in like-for-like sales in the US was due to an accounting error too, but that’s probably wishful thinking.