INTRODUCTION

Fiscal Year End

Balance Sheet Statement ($ Mil)

12/2012 12/2011

12/2010

12/2009

Cash & Equivalent

2,038.0

4,102.0

4,165.0

1,463.0

Receivables

3,527.0

3,438.0

3,723.0

3,116.0

Inventories

1,582.0

1,697.0

1,293.0

2,004.0

Other Cur Assets

6,328.0

6,630.0

4,503.0

1,514.0

Total Cur Assets

13,475.0 15,867.0

13,684.0

8,097.0

Gr Fixed Assets

21,068.0 18,127.0

14,262.0

11,792.0

Accum Depr

9,459.0

5,775.0

4,321.0

Net Fixed Assets

11,609.0 10,666.0

8,487.0

7,471.0

Oth Non-Cur Asset

6,387.0

1,564.0

1,936.0

Tot Non-Cur Asset

17,996.0 13,013.0

10,051.0

9,407.0

Total Assets

31,471.0 28,880.0

23,735.0

17,504.0

Accounts Payable

1,244.0

1,407.0

969.0

864.0

Short-Term Debt

159.0

322.0

389.0

346.0

Other Cur Liab

4,401.0

4,291.0

3,505.0

2,409.0

Total Cur Liab

5,804.0

6,020.0

4,863.0

3,619.0

Long-Term Debt

702.0

448.0

728.0

400.0

Defer Inc Taxes

1,387.0

1,076.0

997.0

620.0

Oth Non-Cur Liab

201.0

2,041.0

275.0

725.0

Tot Non-Cur Liab

2,290.0

3,565.0

2,000.0

1,745.0

Total Liabilities

8,094.0

9,585.0

6,863.0

5,364.0

Common Equity

23,377.0

19,295.0

16,872.0

12,140.0

Assets

7,461.0

2,347.0

Liabilities

Retained Earnings

17,952.0

15,984.0

13,975.0

9,557.0

Total Equity

23,377.0

19,295.0

16,872.0

12,140.0

Tot Liab & Stk Eq

31,471.0

28,880.0

23,735.0

17,504.0

Income Statement ($ Mil)

Fiscal Year End

12/2012

12/2011

12/2010

12/2009

Revenues/Sales

26,273.0

25,070.0

20,847.0

16,202.0

Cost of Sales

9,337.0

7,753.0

7,276.0

6,432.0

Gr Oper Profit

16,936.0

17,317.0

13,571.0

9,770.0

S, G & A
Expenses

5,585.0

5,238.0

4,130.0

3,139.0

Op Prof bef Depr

11,351.0

12,079.0

9,441.0

6,631.0

Deprec & Amort

2,807.0

2,192.0

1,888.0

1,379.0

Oper Inc aft Depr

8,544.0

9,887.0

7,553.0

5,252.0

Other Income,
Net

792.0

799.0

406.0

415.0

Inc Avail for Int

9,171.0

10,686.0

7,959.0

5,667.0

Interest Expense

34.0

27.0

25.0

29.0

Pretax Income

9,137.0

10,659.0

7,934.0

5,638.0

Income Taxes

3,069.0

3,714.0

2,777.0

2,072.0

Net Inc Tot Ops

6,068.0

6,945.0

5,157.0

3,566.0

Special Inc/Chrg

-165.0

0.0

0.0

0.0

Normalized
Income

6,233.0

6,945.0

5,157.0

3,566.0

Total Net Income

6,068.0

6,945.0

5,157.0

3,566.0

Preferred Div

0.0

0.0

0.0

0.0

6,945.0

5,157.0

3,566.0

Net Inc Avail Com 6,068.0

Table 1. Ratio & Trend Analysis

Performance Area
Leverage:
Debt % Tot Assets
Interest Coverage
Liquidity:
Current Ratio
Quick Ratio
Interval Measure
(days)
Profitability:
Profit Margin (%)
Return on Assets (%)
Return on Equity (%)
Efficiency:
Asset Turnover
Receivables
Turnover
Inventory Turnover
Market Value:
Price/Book Value
Debt/Equity (%)
LT Debt % Tot Dbt
Du Pont Ratio

12/2012 12/2011 12/2010 12/2009 Trend

Du Pont Analysis

Since it is important to understand how the company's profitability, efficiency, and leverage are
linked in its financial performance, students are required to demonstrate and evaluate its Du Pont
system over time. The company's return on assets, ROA (=net income/assets), can be expressed
as:
ROA = (Net Income/Revenue) * (Revenue/Assets) = Profit Margin * Asset Turnover
And the company's return on equity, ROE (=net income/equity), can be expressed as
ROE = (Net Income/Revenue) * (Revenue/Assets) * (Assets/Equity) = ROA * Equity Multiplier
Both the company's profitability (as measured in terms of profit margin) and efficiency (as
measured in terms of asset turnover) determine its ROA. This ROA, along with the company's
financial leverage (as measured in terms of its equity multiplier), contributes to its ROE. As the
company's use of leverage magnifies its ROE, students are required to examine ROE carefully.
The changes in the company's ROE are to be noted and explained through its profit margin, asset
turnover, and equity multiplier over time. The objective is to identify the company's strong area
that can be capitalized upon and/or its weak area that must be improved upon. See Table 2
(below) for a sample Du Pont analysis for Intel.