Don’t worry what is Figure 5.3 in question It just list down all the financial r
ID: 2407542 • Letter: D
Question
Don’t worry what is Figure 5.3 in question It just list down all the financial ratios name and formula
Excerpts from the 2012 financial report of Intel, a computer-processor manufacturer, are as follows (dollars in millions). 2012 2011 2010 Balance Sheet Current assets Long-term assets Current liabilities Long-term debt Shareholders' equity Income Statement Sales Net income Interest expense $31,358 52,993 12,898 20,250 51,203 $25,872 5,247 12,028 13,180 45,911 $31,611 31,575 9,327 4,429 49,430 $53,341 11,005 94 $53,999 12,942 192 $43,623 11,464 109 Review this information, calculate relevant ratios from Figure 5-3, and explain why Intel appears to be a good or poor investment. The tax rate was 26 percent. luded the following financial statements in a loanExplanation / Answer
Ratio Analysis
2012
2011
2010
current ratio
current assets/current liabilities
2.43
2.15
3.39
current assets
31358
25872
31611
current liabilities
12898
12028
9327
2012
2011
2010
net profit ratio
net income/sales
20.63%
23.97%
26.28%
Net income
11005
12942
11464
sales
53341
53999
43623
2012
2011
2010
return on equity
net income/total of equity
21.49%
28.19%
23.19%
Net income
11005
12942
11464
total of equity
51203
45911
49430
2012
2011
2010
return on assets
net income/total assets
13.05%
18.20%
18.14%
Net income
11005
12942
11464
total assets = current assets+long term assets
84351
71119
63186
Debt ratio
total of liabilities/total equity
0.65
0.55
0.28
total of liabilities = current liabilities+long term debt
33148
25208
13756
total of equity
51203
45911
49430
profit before tax
net income/(1-income tax rate)
14871.62
17489.19
15491.89
EBIT
profit before tax+interest
14965.62
17681.19
15600.89
Interest
94
192
109
Interest coverage ratio
EBIT/interest
159.21
92.09
143.13
Over all Financial analysis of the company is like this debt ratio has increased drastically over the 3 years period which increases the riskiness of the company. Profitability of the company has decreased over the years and company has excessive investment in working capital, so it is a serious concern for the company and investment in the company is not going to be good investment decision.
Ratio Analysis
2012
2011
2010
current ratio
current assets/current liabilities
2.43
2.15
3.39
current assets
31358
25872
31611
current liabilities
12898
12028
9327
2012
2011
2010
net profit ratio
net income/sales
20.63%
23.97%
26.28%
Net income
11005
12942
11464
sales
53341
53999
43623
2012
2011
2010
return on equity
net income/total of equity
21.49%
28.19%
23.19%
Net income
11005
12942
11464
total of equity
51203
45911
49430
2012
2011
2010
return on assets
net income/total assets
13.05%
18.20%
18.14%
Net income
11005
12942
11464
total assets = current assets+long term assets
84351
71119
63186
Debt ratio
total of liabilities/total equity
0.65
0.55
0.28
total of liabilities = current liabilities+long term debt
33148
25208
13756
total of equity
51203
45911
49430
profit before tax
net income/(1-income tax rate)
14871.62
17489.19
15491.89
EBIT
profit before tax+interest
14965.62
17681.19
15600.89
Interest
94
192
109
Interest coverage ratio
EBIT/interest
159.21
92.09
143.13
Over all Financial analysis of the company is like this debt ratio has increased drastically over the 3 years period which increases the riskiness of the company. Profitability of the company has decreased over the years and company has excessive investment in working capital, so it is a serious concern for the company and investment in the company is not going to be good investment decision.
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