Intel Financial Statements and Financial Ratios

Intel: Brief Summary

Intel Incorporated is one of the most sought-after stocks in the world.  The company’s legendary founder, Gordon Moore, is world-renowned.  Intel Inc. continues to innovate and disrupt its industry under the current leadership of Bob Swan. 

These circumstances have resulted in the organization becoming an industry leader.  For some, these facts alone are reason enough to buy stock in the company.

Intel Financial Report Sources

“Intel 2019 Company Analysis: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this book, the author selected Intel's 2019 10k, 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and Intel's 2019 10k annual report as the basis for information gathering. 

 

 

Section 1: Intel Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Inte's important income statement line item trends from 2015 to 2019, in most cases.

Revenue Growth:  Intel’s revenues ended 2015 at $55 billion.  Over the next five years, the company increased its revenues to approximately 71.9 billion.  This is an average growth rate of about 7%.  However, the slowest annual growth rate was 1.6% from 2018 to 2019.  If this trend continues, then investors should expect the company to initiate cost-cutting measures to best optimize operations to account for slower revenue growth.

SG&A:  The company’s SG&A was 14.3% of revenues in 2015.  In 2019, this line item fell to 8.5% of revenues.  This indicates that the company has taken measures to reduce its overall costs as compared to revenues.  As revenue growth continues to slow, investors should expect this practice to continue.

Intel 2023 Summary Income Statement
Column1	2023	2022	2021	2020	2019
Revenues	54,228	63,054	79,024	77,867	71,965
COGS	32,517	36,188	35,209	34,255	29,825
Gross Profit	21,711	26,866	43,815	43,612	42,140
SG&A	5,634	7,002	6,543	6,180	6,350
Depreciation	7,847	11,128	9,953	10,482	9,204
R & D	16,046	17,528	15,190	13,556	13,362
Other
Total Operating Expenses	21,618	24,532	24,359	19,934	20,105
EBIT	93	2,334	19,456	23,678	22,035
Other Income
Interest Expense	629	1,166	(482)	504	(484)
EBT	762	7,768	21,703	25,078	24,058
Taxes			1,835	4,179	3,010
Net Income	1,689	8,014	19,868	20,899	21,048

 

Section 2: Intel Balance Sheet Analyzed

For Intel's balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Intel's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer a summary analysis of Intel’s important balance sheet line items.

Cash:  Intel’s cash position fell from $15.3 billion in 2015 to $4.2 billion in 2019.  This decrease in cash may indicate that the company is better at using its short-term investment opportunities.  Because the cash level seems to be trending down on an annual basis, and the net income tends to be going up, this indicates that asset reallocation is probably a safe guess.

Short-term Investments:  The organization's short-term investments ended 2015 at $2.7 billion.  Over the next five years, the organization decreases its short-term investments to approximately $1 billion.  This indicates that the company is using its short-term investment reserves for either acquisition or for operations purposes.

Intel 2023 Summary Balance Sheet
Column1	2023	2022	2021	2020	2019
Cash	7,079	11,144	4,827	5,865	4,194
Short Term Investment	17,955	17,194	2,103	2,292	1,082
Account Receivable	3,402	4,133	9,457	6,782	7,659
Inventory	11,127	13,224	10,776	8,427	8,744
Other
Current Assets	43,269	50,407	57,718	47,249	31,239
Net PPE	96,647	80,860	63,245	56,584	55,386
Goodwill	27,591	27,591	26,963	26,971	26,276
Other
Total Assets	191,572	182,103	168,406	153,091	136,524
Accounts Payable	8,578	9,595	5,747	5,581	4,128
Accrued Expense	3,655	4,084	4,535	3,999	3,853
Accrued Taxes	1,107	2,251
Notes Payable	2,288	4,367	4,591	2,504	3,693
LT Debt - Current
Other
Total Current Liabilities	28,053	32,155	27,462	24,754	22,310
LT Debt	46,978	37,684	33,510	33,897	25,308
Other
Total Liabilities	81,607	78,817	73,015	72,053	59,020
Common Stock	36,649	31,580	28,006	25,556	25,261
Treasury
Retained Earnings	69,156	70,405	68,265	56,233	53,523
Other
Total Equity	109,965	103,286	95,391	81,038	77,504
Total Equity & Liability	191,572	182,103	168,406	153,091	136,524

 

Section 3: Intel Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Intel from 2015 to 2019.  In reviewing each of Intel's financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Intel’s Important Financial ratios. 

Intel Current Ratio

Intel’s current ratio fell from 2.4 in 2015 to 1.4 and 2019.  Also, this decline has been periodic over the last five years.  This shows that the company has taken steps to better utilize its cash.  A cautionary note, if their current ratio falls below 1.0, investors should become concerned about short-term liquidity.

Intel Fixed Asset Turnover

The fixed asset turnover for the firm ended 2015 at 1.74.  Over the next five years, the company’s ratio would steadily fall to 1.3.  This indicates that the company is using its fixed assets less optimally over time.  This problem falls square upon the shoulders of the executive and management team.  To mitigate this issue, the organization should take action to liquidate some fixed assets that are not being fully utilized.

Intel Return on Equity

Intel’s return on equity ended 2015 at 18.7%.  Over the next few years, this would grow to approximately 27.2%.  Their return on equity growth may be spurred by their increased use of debt.  Regardless, as long as their risk is not elevated too much, this is an excellent strategy.

Intel Debt Ratio

Intel’s debt ratio had fallen from 19.75% in 2015 to 18.5% in 2019.  In reviewing technology competitors, their debt ratio seems to be well below average.  A better strategy would be for the organization to take on debt to about a 30 to 40% ratio.  With these additional funds, the company may be able to acquire other companies, payout dividends, or initiate a stock buyback strategy.