Intel Paper
Intel Financial Analysis and Industry Comparison
Intel Corporation was formed in 1968 by 2 engineers from Fairchild Semiconductor Company. Today it’s a leader in the semiconductor industry with a market capitalization of $169.9 billion. Below we will use Intel’s financial statements to do a short analysis of the last 3 years of operations and how they currently compare to the industry benchmarks. The ratios we will consider are the Current Ratio, Quick Ratio, Debt/Equity Ratio and Price/Earnings (P/E) Ratio.
Ratio Analysis
Intel’s results for the last fiscal year, ending December 28, 2013, show revenues of $52.708 million. This is a decline of 1.2% year on year and a decline for the 2nd year. However, there was a sharp 23.8% increase in revenue from 2010 to 2011 thus current declines still put revenues above pre 2011 levels. Net income for 2013 was $9.620 million, a decline of 12.6% year on year and a decline for the 3rd year in a row. However, similar to revenues, there was a sharp 162.4% increase in net income from 2009 – 2010, thus net income for 2013 are above pre 2010 levels.
Based on the current ratio Intel’s financial health appears to be sound. The current ratio for year-end (YE) 2013 was 2.36 vs. 2.43 in 2012 and 2.15 for 2011. This means for every $1 of debt they have $2.36 in assets to cover their obligations.
The YE 13 quick ratio was 1.12, which means that the company is liquid enough to cover current liabilities. An ideal quick ratio is 1:1. Reviewing the YE 12 quick ratio of 1.71 and YE 11 of 1.54, it appears that during those years Intel was keeping to much cash on hand or had a hard time collecting on their receivables. This seems to have been fixed in the last fiscal year.
The Debt/Equity ratio for YE 13 was 0.23; slightly lower that 0.26 in 2012 but much higher than 0.15 in 2011 and 0.04 in 2010. This means that Intel took on debt in 2011 & 2012 to finance growth. However,
Intel Corporation was formed in 1968 by 2 engineers from Fairchild Semiconductor Company. Today it’s a leader in the semiconductor industry with a market capitalization of $169.9 billion. Below we will use Intel’s financial statements to do a short analysis of the last 3 years of operations and how they currently compare to the industry benchmarks. The ratios we will consider are the Current Ratio, Quick Ratio, Debt/Equity Ratio and Price/Earnings (P/E) Ratio.
Ratio Analysis
Intel’s results for the last fiscal year, ending December 28, 2013, show revenues of $52.708 million. This is a decline of 1.2% year on year and a decline for the 2nd year. However, there was a sharp 23.8% increase in revenue from 2010 to 2011 thus current declines still put revenues above pre 2011 levels. Net income for 2013 was $9.620 million, a decline of 12.6% year on year and a decline for the 3rd year in a row. However, similar to revenues, there was a sharp 162.4% increase in net income from 2009 – 2010, thus net income for 2013 are above pre 2010 levels.
Based on the current ratio Intel’s financial health appears to be sound. The current ratio for year-end (YE) 2013 was 2.36 vs. 2.43 in 2012 and 2.15 for 2011. This means for every $1 of debt they have $2.36 in assets to cover their obligations.
The YE 13 quick ratio was 1.12, which means that the company is liquid enough to cover current liabilities. An ideal quick ratio is 1:1. Reviewing the YE 12 quick ratio of 1.71 and YE 11 of 1.54, it appears that during those years Intel was keeping to much cash on hand or had a hard time collecting on their receivables. This seems to have been fixed in the last fiscal year.
The Debt/Equity ratio for YE 13 was 0.23; slightly lower that 0.26 in 2012 but much higher than 0.15 in 2011 and 0.04 in 2010. This means that Intel took on debt in 2011 & 2012 to finance growth. However,
References: Alix Partners. (2014). Reviving Growth and Rebuilding Market. Retrieved from http://www.alixpartners.com/en/Publications/AllArticles/tabid/635/articleType/ArticleView/articleId/907/Reviving-Growth-and-Rebuilding-Market-Value.aspx#sthash.UfrDR4KR.dpbs