Sunmmative AssessmentOne of the most successful technology companies in history, Intel, is facing weakening financial results. It has analysts forecasting declines in many key...

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Sunmmative Assessment One of the most successful technology companies in history, Intel, is facing weakening financial results. It has analysts forecasting declines in many key profitability ratios. Read the excerpts of the following article on October 17, 2022: Our hypothetical scenario is that you are interviewing to join the FP&A staff. David Zinsner, is looking to add to his FP&A team to evaluate both external financial reporting and internal financial performance. You are in your final round of interviews. Note: much of this assessment is based on the Intel 10-K. Some portions are hypothetical. You will see references to data or the 10-K itself. Please remember to download the 2021 Intel 10-K to answer the last question. You are asked the following questions: Question 1Where would you expect to find the following information about Intel (for full credit, cite the SEC Form and, if the form is the 10-K, in which part of the annual report) a. Whether these statements can be used for analysis by investors, i.e. the information is accurate enough to use. b. The earnings per share and net income for the current year c. Who are the individuals responsible for the financial statements and the internal controls for the company, along with their assurance for materially correct information provided. d. News that is recent and significant, such as a merger proposal made to the company. e. An explanation of the major financial results for the company in the recent year, written in paragraphs supported by financial data. 2Would Intel report using GAAP or IFRS? Why would they choose this set of standards? Why would others choose IFRS? 3What is the SEC's position on U.S. adoption of IRFS? What are the steps to accomplish this? Company: Intel (NAS: INTC)FY 2017FY 2018FY 2019FY 2020FY 2021 Amounts in Thousands, USD (except Ratios, Multiples & per share items) RevenueImportant! For the next section on financial analysis, click the "+" on the very top to open up columns on the left. Total Revenue62,761,00070,848,00071,965,00077,867,00079,024,000 Cost of Revenue23,663,00027,111,00029,825,00034,255,00035,209,0004Compute the yearly sales growth rates for the four years. How would you assess their sales trends? Total Gross Profit39,098,00043,737,00042,140,00043,612,00043,815,000 Operating (Income)/Expenses Selling, General and Administrative Expenses7,629,0006,950,0006,350,0006,180,0006,543,00020172018201920202021 Research and Development Expenses13,035,00013,543,00013,362,00013,556,00015,190,000revenue growth rates (year to year)n/a Total Operating (Income)/Expenses20,664,00020,493,00019,712,00019,736,00021,733,000 Total Operating Profit/(Loss)18,434,00023,244,00022,428,00023,876,00022,082,000Your assessment of sales trends over the past five years Non-Operating Income/(Expenses) Net Finance (Income)/Expense Net Interest (Income)/Expense Interest Expense 646,000468,000489,000629,000597,000 Interest Income441,000438,000483,000272,000144,0005Compute these costs as a percentage of revenues for the five years Total Net Interest (Income)/Expense205,00030,0006,000357,000453,00020172018201920202021 Other Finance (Income)/Expenses144,000(156,000)(490,000)147,00029,000Cost of revenues Total Net Finance (Income)/Expense349,000(126,000)(484,000)504,000482,000Selling, general and administrative expenses Net Investment Income3,484,000299,0001,661,0002,207,0002,883,000Research and development Irregular (Income)/ExpensesTotal operating expenses Impairment/Write Off/Write Down of Other Assets833,000424,000122,000310,000441,000What is your assessment of the trend? Is 2021 favorable or unfavorable? Litigation (Income)/Expense67,0002,291,000a. cost of revenues Restructuring and Reorganization (Income)/Expense384,000(72,000)393,000124,00048,000 Total Irregular (Income)/Expenses1,217,000352,000515,000501,0002,780,000b. selling, general and administrative expenses Total Non-Operating Income/(Expenses), Total1,918,00073,0001,630,0001,202,000(379,000) Pretax Income20,352,00023,317,00024,058,00025,078,00021,703,000c. Research and development Provision for Income Tax10,751,0002,264,0003,010,0004,179,0001,835,000 Net Income Available to Common Stockholders9,601,00021,053,00021,048,00020,899,00019,868,000d. Total operating expenses Basic EPS Basic EPS from Continuing Operations2.044.574.774.984.89Compute and interpret these ratios Total Basic EPS2.044.574.774.984.896Compute Financial Leverage = Average Total Assets/Average Equity Diluted EPSCompute for:20172018201920202021 Diluted EPS from Continuing Operations1.994.484.714.944.86Average total assetsn/a Total Diluted EPS1.994.484.714.944.86Average equityn/a Basic Weighted Average Shares Outstanding4,701,000,0004,611,000,0004,417,000,0004,199,000,0004,059,000,000Total Equity to Total Assetsn/a Diluted Weighted Average Shares Outstanding4,835,000,0004,701,000,0004,473,000,0004,232,000,0004,090,000,000 What is the purpose of this ratio? What category is it (e.g. profitability, liquidity, solvency, etc.) FY 2017FY 2018FY 2019FY 2020FY 2021How would you interpret the results for the years above? Favorable/not? Assets Current Assets Cash, Cash Equivalents and Short Term Investments Cash and Cash Equivalents3,433,0003,019,0004,194,0005,865,0004,827,000 Short Term Investments10,569,0008,631,0008,929,00018,030,00023,586,0007Current Ratio = Average Current Assets/Average Current Liabilities Total Cash, Cash Equivalents and Short Term Investments14,002,00011,650,00013,123,00023,895,00028,413,000Compute for:20172018201920202021 InventoriesAverage current assetsn/a Raw Materials, Consumables and Supplies738,000813,000840,000908,0001,441,000Average current liabilitiesn/a Work-in-Process4,213,0004,511,0006,225,0005,693,0006,656,000Current Ration/a Finished Goods and Merchandise2,032,0001,929,0001,679,0001,826,0002,679,000What is the purpose of this ratio? What category is it (e.g. profitability, liquidity, solvency, etc.) Total Inventories6,983,0007,253,0008,744,0008,427,00010,776,000 Trade and Other Receivables, Current5,607,0006,722,0007,659,0006,782,0009,457,000How would you interpret the results for the years above? Favorable/not? Assets Held for Sale/Discontinued Operations, Current0005,400,0006,942,000 Other Current Assets2,908,0003,162,0001,713,0002,745,0002,130,000 Total Current Assets29,500,00028,787,00031,239,00047,249,00057,718,0008Days Sales Outstanding = Average Accounts Receivable/ (Sales/365) Non-Current AssetsCompute for:20172018201920202021 Net Property, Plant and EquipmentAvg A/Rn/a Gross Property, Plant and Equipment100,395,000114,318,000128,707,000134,229,000148,539,000Salesn/a Accumulated Depreciation (59,286,000)(65,342,000)(73,321,000)(77,645,000)(85,294,000)DSOn/a Total Net Property, Plant and Equipment41,109,00048,976,00055,386,00056,584,00063,245,000What is the purpose of this ratio? What category is it (e.g. profitability, liquidity, solvency, etc.) Net Intangible Assets Gross Goodwill and Other Intangible Assets40,768,00041,303,00043,067,00043,360,00044,025,000How would you interpret the results for the years above? Favorable/not? Goodwill24,389,00024,513,00026,276,00026,971,00027,920,000 Intangibles other than Goodwill Software and Technology8,912,0009,611,0009,407,00010,188,00011,102,0009Days Inventory Outstanding = average inventory/(COGS/365) Licenses and Rights3,104,0002,932,0002,975,0002,836,0002,893,000Compute the Days in Inventory for these years Research and Development2,168,0001,497,0001,664,000954,00020172018201920202021 Customer Relationships2,195,0002,179,0002,160,0002,110,0002,110,000Average inventoryn/a Other Intangible Assets571,000585,000301,000COGS (use Cost of Sales)n/a Total Intangibles other than Goodwill16,379,00016,790,00016,791,00016,389,00016,105,000DIOn/a Total Gross Goodwill and Other Intangible Assets40,768,00041,303,00043,067,00043,360,00044,025,000What is the purpose of this ratio? What category is it (e.g. profitability, liquidity, solvency, etc.) Accumulated Amortization and Impairment(3,634,000)(4,954,000)(5,964,000)(7,363,000)(9,792,000) Total Net Intangible Assets37,134,00036,349,00037,103,00035,997,00034,233,000How would you interpret the results for the years above? Favorable/not? Long Term Investments Equity Method Investments8,579,0006,042,0003,967,0005,152,0006,298,000 Marketable Securities, Non-Current3,712,0003,388,0003,276,0002,192,000840,000 Total Long Term Investments12,291,0009,430,0007,243,0007,344,0007,138,000