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Intel's Financial Statement Analysis

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The 2010 Intel Annual Report can be found at the following Web site: www.pearsonhighered.com/fraser. Using the annual report, answer the following questions:

(a) Using the Intel Annual Report, calculate key financial ratios for all years presented.
(b) Using the library, find industry averages to compare to the calculations in (a).
(c) Write a report to the management of Intel. Your report should include an evalu­ ation of short-term liquidity, operating efficiency, capital structure and long-term solvency, profitability, market measures, and a discussion of any quality of finan­ cial reporting issues. In addition, strengths and weaknesses should be identified, and your opinion of the investment potential and the creditworthiness of the
firm should be conveyed to management.

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Solution Preview

(a) See excel attached for key financial ratios.
(b) I used industry averages or Texas Instrument ratios when an industry average was not available.

Dear Management of Intel,

I have reviewed the key financial ratios for Intel and compared these to industry means (averages) or Texas Instruments if the industry does not readily publish a comparable ratio. My observations are shown below.


Like the industry, Intel's liquidity is very strong. Typically, a current and quick ratio above one is adequate and Intel is above 2 in all years shown. This is along the industry average.

Operating efficiency

The inventory turnover, the key for a manufacturer, is better than the industry. It hovers around 4 turns a year, turning the ...

Solution Summary

Your tutorial is 457 words and a spreadsheet of key financial ratios and industry comparisons.