Financial Ratios: Intel 2008
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Requirement 1:
Compute the following profitability measures for the year ended December 27, 2008:
(a) Return on investment, based on net income (perform a DuPont analysis).
(b) Return on equity, based on net income.
(c) Price/earnings ratio.
(d) Dividend yield.
(e) Dividend payout ratio.
Requirement 2:
Compute the following liquidity measures at December 27, 2008:
(a) Working capital.
(b) Current ratio.
(c) Acid-test ratio.
Requirement 3:
Compute the following activity measures for the year ended December 27, 2008:
(a) Number of days' sales in accounts receivable, based on a 365-day year.
(b) Number of days' sales in inventory, based on a 365-day year.
(c) Accounts receivable turnover. (Round your answer to 1 decimal place.)
(d) Inventory turnover.
(e) Turnover of net property, plant, and equipment.
Requirement 4:
Compute the following financial leverage measures at December 27, 2008:
(a) Debt ratio.
(b) Debt/equity ratio.
Requirement 5:
Compute the following physical measures of Intel's profitability at December 27, 2008:
(a) Net revenues per employee.
(b) Operating income per employee.
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Solution Summary
This solution illustrates how to compute numerous financial ratios.
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Requirement 1:
Compute the following profitability measures for the year ended December 27, 2008:
(a) Return on investment, based on net income (perform a DuPont analysis). (Do not round intermediate calculations and round final answer to 1 decimal place. Omit the "%" sign in your response.)
ROI %
ROI = Net income/((Total Assets at 12/27/08 + Total Assets at 12/29/07)/2)
ROI = $5,292/(($50,715 + $55,651)/2)
ROI = $5,292/($106,366/2)
ROI = $5,292/$53,183
ROI = 9.95%
(b) Return on equity, based on net income. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
ROE %
ROE = Net income/((Total Equity at 12/27/08 + Total Equity at 12/29/07)/2)
ROI = $5,292/(($39,088 + $42,762)/2)
ROI = $5,292/($81,850/2)
ROI = $5,292/$40,925
ROI = 12.93%
(c) Price/earnings ratio. Use $14.18 as the year-end market price. (Round your answer to 1 decimal place.)
Price/earnings ratio
Price/earnings ratio = Price per share/Basic earnings per share
Price/earnings ratio = $14.18/$.93
Price/earnings ratio = 15.25
(d) Dividend yield. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Dividend yield %
Dividend yield = Annual dividend/Price per share
Dividend yield = ($.14 + $.14 +$.14+ $.1275)/$14.18
Dividend yield = $.5475/$14.18
Dividend yield = 3.86 percent
(e) Dividend payout ratio. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Dividend payout ratio %
Dividend payout ratio = Dividend per share/Earnings per share
Dividend payout ratio = $.5475/$.93
Dividend payout ratio = 58.87 percent
Requirement 2:
Compute the following liquidity measures at December 27, 2008:
...
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