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INTEL CORPORATION
Intel Corporation
Notes: 1. The “other” included with interest income could be operating income.
Operating Assets
Cash $ 163
Accounts receivable 3,527
Inventories 1,582
Deferred tax assets 618
Other current assets 122
Property, plant and equipment, net 11,609
Other assets 1,022
18,643
Operating Liabilities
Financial Assets
Notes: 1. The operating cash component of cash and cash equivalents was
asset.
2. Trading assets are deemed part of financing activities.
debt securities.
Notes:
a) FCF ≡ C − I = OI − ∆ NOA
1991 (112.3)
1992 (107.3)
1993 (31.5)
1994 (20.3)
1991 3.6
1992 5.8
1993 5.1
1994 3.4
its operations. Like many growing companies, it’s generating negative free
cash flow because of investment in new aircraft (see property, plant and
profitability and a decline in the rate of investment. The negative free cash
debt was actually reduced. How was this done with negative free cash flow?
Notes:
a) FCF ≡ C − I = OI − ∆ NOA
1991 (112.3)
1992 (107.3)
1993 (31.5)
1994 (20.3)
1991 4.1%
1992 10.0
1993 12.9
1994 13.6
1991 3.6
1992 5.8
1993 5.1
1994 3.4
e) What is the BIG PICTURE? Southwest has become increasingly profitable in
its operations. Like many growing companies, it’s generating negative free
cash flow because of investment in new aircraft (see property, plant and
profitability and a decline in the rate of investment. The negative free cash
debt was actually reduced. How was this done with negative free cash flow?
Chapter 10):
Balance Sheets
1996 1995
Operating assets (OA):
Income Statements
1996 1995
NFO −5.2
(a) FLEV = = = -0.063
CSE 82 .8
OL 22 .2
OLLEV = = = 0.286
NOA 77 .6
OI
(b) RNOA =
Ave . NOA
4.1
=
76 .2
= 5.38%
4.1
PM = = 2.45%
167 .1
167 .1
ATO = = 2.19 (use average NOA)
76 .2
6.4
Sales PM = = 3.83%
167 .1
Decompose PM:
Decompose ATO
Turnover Inverse
167 .1
Accounts receivable turnover = = 16.38 0.0611
10 .2
167 .1
Inventory turnover = = 11.94 0.0838
14 .0
167 .1
Other current asset turnover = = 22.89 0.0437
7.3
167 .1
PPE turnover = = 2.68 0.3731
62 .4
167 .1
Other asset turnover = = 47.74 0.0209
3 .5
167 .1
Operating liability turnover = = (7.92) -0.1263
21 .1
= 21.1 × 4.0%
= 0.844
4.1 +0.844
Return on operating assets (ROOA) =
97 .3
= 5.08%
OL
Operating liability leverage =
NOA
21 .1
= (using averages for year)
76 .2
= 0.277
= 1.08%
So,
= 5.38%
Financial Statement Analysis: Ben & Jerry’s
First reformulate the financial statements (as in Exercise 10.6 in
Chapter 10):
Balance Sheets
1996 1995
Operating assets (OA):
Income Statements
1996 1995
NFO −5.2
(a) FLEV = = = -0.063
CSE 82 .8
OL 22 .2
OLLEV = = = 0.286
NOA 77 .6
OI
(b) RNOA =
Ave . NOA
4.1
=
76 .2
= 5.38%
4.1
PM = = 2.45%
167 .1
167 .1
ATO = = 2.19 (use average NOA)
76 .2
Decompose PM:
Decompose ATO
Turnover Inverse
167 .1
Accounts receivable turnover = = 16.38 0.0611
10 .2
167 .1
Inventory turnover = = 11.94 0.0838
14 .0
167 .1
Other current asset turnover = = 22.89 0.0437
7.3
167 .1
PPE turnover = = 2.68 0.3731
62 .4
167 .1
Other asset turnover = = 47.74 0.0209
3 .5
167 .1
Operating liability turnover = = (7.92) -0.1263
21 .1
= 21.1 × 4.0%
= 0.844
4.1 +0.844
Return on operating assets (ROOA) =
97 .3
= 5.08%
OL
Operating liability leverage =
NOA
21 .1
= (using averages for year)
76 .2
= 0.277
= 1.08%
So,
= 5.38%