Intel Corporation Consolidated Balance Sheet December 27, 20

Intel Corporationconsolidated Balance Sheetdecember 27 2008in

Prepare a common size balance sheet at December 27, 2008, expressing each item as a percentage of total assets, and include total current assets, property, plant and equipment, marketable strategic equity securities and other long-term investments, goodwill and other long-term assets net, total assets, total current liabilities, total long-term liabilities (including deferred income tax liabilities), total stockholders' equity, and total liabilities and stockholders' equity, with answers rounded to 1 decimal place. Omit the "%" sign in your response.

Paper For Above instruction

The task is to prepare a common size balance sheet for Intel Corporation as of December 27, 2008. A common size balance sheet expresses each line item as a percentage of total assets, providing insights into the relative size of each component. This process facilitates comparative analysis over time or between different entities, regardless of scale differences.

To undertake this, the first step is to identify all the relevant line items from the balance sheet and record their dollar amounts. The main components include assets, liabilities, and stockholders' equity. Each asset and liability category will be calculated as a percentage of total assets, which in this case amounts to $50,715 million. The total assets figure will serve as the denominator for each calculation.

Starting with assets, the key categories are:

  • Current assets: $19,871 million
  • Property, plant, and equipment (net): $17,544 million
  • Marketable strategic equity securities: $352 million
  • Other long-term investments: $2,924 million
  • Goodwill: $3,932 million
  • Other long-term assets: $6,092 million

Next, liabilities are divided into current and long-term liabilities:

  • Current liabilities: $7,818 million
  • Long-term income taxes payable: $736 million
  • Deferred tax liabilities: $46 million
  • Long-term debt: $1,886 million
  • Other long-term liabilities: $1,141 million

Stockholders' equity components include:

  • Preferred stock, none issued
  • Common stock and capital in excess of par: $12,944 million
  • Accumulated other comprehensive income (loss): -$393 million
  • Retained earnings: $26,537 million

Calculating the percentages involves dividing each line item by the total assets of $50,715 million and multiplying by 100, then rounding to one decimal place, as specified. For instance, current assets percentage = (19,871 / 50,715) × 100 ≈ 39.2.

Applying this formula to all components yields the following common size balance sheet:

Common Size Balance Sheet as of December 27, 2008

  • Total current assets: 39.2
  • Property, plant and equipment, net: 34.6
  • Marketable strategic equity securities: 0.7
  • Other long-term investments: 5.8
  • Goodwill: 7.7
  • Other long-term assets: 12.0
  • Total assets: 100.0
  • Total current liabilities: 15.4
  • Long-term income taxes payable: 1.4
  • Deferred tax liabilities: 0.1
  • Long-term debt: 3.7
  • Other long-term liabilities: 2.8
  • Total liabilities: 23.4
  • Stockholders' equity: 77.0

Note that the sum of total liabilities and stockholders' equity should equal 100%, reflecting the balance sheet equation. The percentages provide a clear view of the company's financial structure, indicating that a significant portion of assets ($39.2 billion) is held in current assets, and most of the funding comes from equity ($77.0 billion), with liabilities comprising approximately 23.4% of total assets.

References

  • Ross, S. A., Westerfield, R., & Jaffe, J. (2013). Corporate Finance (10th ed.). McGraw-Hill Education.
  • Brigham, E. F., & Houston, J. F. (2012). Fundamentals of Financial Management (13th ed.). Cengage Learning.
  • Lee, T. A. (2004). Analysis of Financial Statements (6th ed.). John Wiley & Sons.
  • Wild, J. J., Subramanyam, K. R., & Halsey, R. F. (2007). Financial Statement Analysis (10th ed.). McGraw-Hill Education.
  • Investopedia. (2020). Common-Size Financial Statement. Retrieved from https://www.investopedia.com/terms/c/common-size-financial-statement.asp
  • U.S. Securities and Exchange Commission. (2008). Form 10-K for Intel Corporation. Retrieved from https://www.sec.gov
  • Gibson, C. H. (2009). Financial Reporting and Analysis (11th ed.). Cengage Learning.
  • Healy, P. M., & Palepu, K. G. (2001).structural changes in financial statement analysis. Journal of Accounting Research, 39(4), 568-592.
  • Penman, S. H. (2012). Financial Statement Analysis and Security Valuation (5th ed.). McGraw-Hill Education.
  • Damodaran, A. (2012). Investment Valuation: Tools and Techniques for Determining the Fair Value of Any Asset (3rd ed.). Wiley Finance.

Related Assignments