Makeup Assignment
The questions in this assignment all use Intel (ticker: INTC) as the analysis company. In order to
respond to the questions, you will need to use the financial statements on pages 48 to 51 of
Intel’s 10-K SEC report for the fiscal year ended December 25, 2010. This report can be obtained
from the “Filings / Search for Company Filings” section of www.sec.gov. Whenever the questions
refer to “FYE 12/2010” they are referring to the fiscal year ended 12/25/2010 which is covered in
the above mentioned 10-K report. Whenever the questions refer to “FYE 12/2011” they are
referring to the fiscal year ending in December 2011, assuming this is a future year which has not
yet been reported.
1. Define the term “book value” and state Intel’s book value at the end of its FYE 12/2010.
2. Define the term “market value” and state Intel’s markets value at the end of its FYE 12/2010.
3. Explain why there is a difference between the two values.
4. State the one account (account title and amount) that explains most of the difference between
net income (NI) and cash flow from operations (CFO).
5. Explain why this account is included in one calculation (NI) and not in the other (CFO).
6. One of Intel’s competitors, Advanced Micro Devices (ticker: AMD) reported net income of
7.25%, compare this figure to Intel’s and state if Intel’s figure is favorable or unfavorable to
shareholders as compared to AMD’s.
7. Define the term “current ratio.” Calculate Intel’s current ratio for its FYE 12/2010 and compare it
to the same ratio for the prior year. Is the ratio for the FYE 12/2010 better or worse than the prior
year’s?
8. Define the term “days sales in inventory.” Calculate Intel’s days sales in inventory for its FYE
12/2010 and compare it to the same ratio for the prior year. Is the FYE 12/2010 ratio better or
worse than the prior year’s?
For questions 9 to 12: Intel is forecasting that in FYE 12/2011 it will pay no dividends and it will
grow its sales by 25%. Intel expects every single one of its accounts to vary proportionately with
sales. Intel is preparing a simple financial planning model for its FYE 12/2011 using only the
following accounts: Sales, costs, net income, assets, liabilities and equity. If needed, Intel will take
on more debt (but not more equity) to finance its growth in FYE 12/2011.
9. Prepare an income statement for FYE 12/2010 using the same figures as reported in Intel’s
10K but using only the above listed accounts.
10. Prepare a balance sheet FYE 12/2010 using the same figures as reported in Intel’s 10K but
using only the above listed accounts.
11. Prepare a pro-forma income statement for FYE 12/2011 considering the assumptions
stated above.

12. Prepare a pro-forma balance sheet for FYE 12/2011 considering the assumptions stated
above and making sure it is reconciled with the pro-forma income statement (i.e. equity
increase = net income).
13. According to its statement of cash flows, Intel paid dividends of $3,503 million during its FYE
12/2010. Define “dividend payout ratio” and state Intel’s dividend payout ratio for its latest fiscal
year.
14. Define “internal growth rate” and calculate Intel’s internal growth rate assuming Intel plans to
maintain the retention ratio it had in its FYE 12/2010.
15. Define “sustainable growth rate” and calculate Intel’s sustainable growth rate assuming Intel
plans to maintain the retention ratio it had in its FYE 12/2010.