Dont worry what is Figure 53 in question It just list down a

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 loan

Solution

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.