AC 298UNIT 5 SEMINARProfessor Anthony Lo Secco

In unit 5…

1) Examine financial information for Intel Corporation

2) Identify financial trends3) Study financial statements

a. Income Statementb. Balance Sheetc. Statement of OEd. Statement of Cash Flows

Unit 5 Project

For this activity you will collect the financial data of the Intel Corporation. Publicly traded companies such as Intel make their financial statements available online.

We know from our studies that financial statements are useful for internal purposes, as well as for external purposes, for potential investors. Intel’s financial statements tell a story, and we will identify some aspects of the financials and see if you can retell that story.

Unit 5 Project

Go to Intel’s “Annual reports, 10-Ks and proxy statements” page at http://phx.corporate-ir.net/phoenix.zhtml?c=101302&p=irol-reportsAnnual and download the PDF file titled Form 10-K. (This should be the second bullet point under 2007 Online Annul Report and 10-K).

This assignment will concentrate on these financial statements.

Download to look at during this seminar! :)

Intel corporation

Intel information: 2007 2006

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,334 $35,382

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,430 17,164

Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,904 18,218

Research and development . . . . . . . . . . . . . . . . . . . . . . . . 5,755 5,873

Marketing, general and administrative . . . . . . . . . . . . . . . . 5,401 6,096

Restructuring and asset impairment charges . . . . . . . . . . . . 516 555

Amortization of acquisition-related intangibles and costs . . . 16 42

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,216 5,652

Gains (losses) on equity investments, net . . . . . . . . . . . . . . 157 214

Interest and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 793 1,202

Income before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,166 7,068

Provision for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,190 2,024

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,976 $ 5,044

Question 1

Identify the income statement. Concentrate on the operating expenses. Please write in your own words a paragraph about 50 words defining operating expense and stating the trends in operating expenses. Tell what you think “restructuring and asset impairment charges are.”

Question 1

Discussion points: What are operating expenses? What is the trend in operating expense? What are the restructuring and asset

charges? Why is it important to identify

trends? How do we use these trends for

future projections?

Question 2

Identify the balance sheets for 2006 and 2007. Please visualize (calculate) the current ratios for both years, writing a paragraph of at least 50 words, stating what elements of the current ratios are responsible for the changes.

Do you know how to calculate the current ratio? (formula)

Question 2

Formula for current ratio: Current assets / current liabilities What caused the change? Is the change good or bad?

What other ratios might you use with this organization? For what purpose?

Question 3

Identify the statements of cash flows. Please show the three activities (section) detailed in the statement of cash flows and identify the information and where the preparer of a statement of cash flows can find the information to prepare each section. Your statement should be one or more paragraphs totaling at least 50 words.

Question 3

What are the three main areas of the Statement of Cash Flows?

What information is found in each area? Cash inflow/outflow of what?

What is the importance of the Statement of Cash Flows?

What other ideas/thoughts do you have about the Statement of Cash Flows?

Question 4

Show the statement of owner’s equity. Several factors are responsible for the change in the owner’s equity in the two years being compared. Intel has only one class of stock outstanding. Did the number of shares of that stock increase or decrease during the year 2007? Did the company pay a cash dividend during the year? If so, how much per share? Where did you find that information? Please identify those elements, writing a paragraph of at least 50 words, stating where you can find the details of these answers.

Question 4

What is a cash dividend? Does Intel pay other types of

dividends? Why is this information

important? To whom? Where else could you find

information about Intel’s stocks, equity and related trading information?

Assignment Checklist…

1. Identify the trends in operating expenses (Question 1)

2. Show the current ratio (Question 2)

3. Identify the three activities (sections) on the statement of cash flows (Question 3)

4. The dividends paid, number of shares, and dividends per share (Question 4)

You… The accountant

How important is it for an accountant to analyze financial reports?

What kinds/types of analysis are accountants responsible for?

Share any other thoughts about the role of the accountant in financial statement preparation

Thinking about your final project…

What financial information have you located for the coffee shop?

Are the financial statements calculated accurately? How do you know?

How can you and/or Mike use this information?

Thinking about your final project…

What conclusions have you drawn about: The Income Tax 2006? Sales Tax? Others?

Are there any missing documents? Do any of these missing items

affect the bottom line?

Unit 5 project

Due TUESDAY AT 11:59PM ET Use APA Guidelines

Be sure to look at notes I’ve made to previous projects so you don’t make same mistakes!

Unit 5…

Half way there!!QUESTIONS??Have a SUPER Week!