Following are the income statement and balance sheet for Intel Corporation. INTEL CORPORATION Consolidated Statements of Income
Question:
Following are the income statement and balance sheet for Intel Corporation.
INTEL CORPORATION Consolidated Statements of Income | |||
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Years Ended December (In Millions, Except Per Share Amounts) | 2012 | 2011 | 2010 |
Net revenue | $ 53,341 | $ 53,999 | $ 46,623 |
Cost of sales | 20,190 | 20,242 | 15,132 |
Gross margin | 33,151 | 33,757 | 28,491 |
Research and development | 10,148 | 8,350 | 6,576 |
Marketing, general and administrative | 8,057 | 7,670 | 6,309 |
Amortization of acquisition-related intangibles | 308 | 260 | 18 |
Operating expenses | 18,513 | 16,280 | 12,903 |
Operating income | 14,638 | 17,477 | 15,588 |
Gains (losses) on other equity investments, net | 141 | 112 | 348 |
Interest and other, net | 94 | 192 | 109 |
Income before taxes | 14,873 | 17,781 | 16,045 |
Provisions for taxes | 3,868 | 4,839 | 4,581 |
Net income | $ 11,005 | $ 12,942 | $ 11,464 |
INTEL CORPORATION Consolidated Balance Sheets | ||
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As of Year-Ended (In millions, except par value) | Dec. 29, 2012 | Dec. 31, 2011 |
Assets | ||
Current assets | ||
Cash and cash equivalents | $ 8,478 | $ 5,065 |
Short-term investments | 3,999 | 5,181 |
Trading assets | 5,685 | 4,591 |
Accounts receivables, net | 3,833 | 3,650 |
Inventories | 4,734 | 4,096 |
Deferred tax assets | 2,117 | 1,700 |
Other current assets | 2,512 | 1,589 |
Total current assets | 31,358 | 25,872 |
Property, plant and equipment, net | 27,983 | 23,627 |
Marketable equity securities | 4,424 | 562 |
Other long-term investments** | 493 | 889 |
Goodwill | 9,710 | 9,254 |
Identified intangible assets | 6,235 | 6,267 |
Other long-term assets | 4,148 | 4,648 |
Total assets | $84,351 | $71,119 |
Liabilities | ||
Current liabilities | ||
Short-term debt | $312 | $247 |
Accounts payable | 3,023 | 2,956 |
Accrued compensation and benefits | 2,972 | 2,948 |
Accrued advertising | 1,015 | 1,134 |
Deferred income | 1,932 | 1,929 |
Other accrued liabilities | 3,644 | 2,814 |
Total current liabilities | 12,898 | 12,028 |
Long-term debt | 13,136 | 7,084 |
Long-term deferred tax liabilities | 3,412 | 2,617 |
Other long-term liabilities | 3,702 | 3,479 |
Stockholders' equity | ||
Preferred stock, $0.001 par value, 50 shares authorized; none issued | -- | -- |
Common stock, $0.001 par value, 10,000 shares authorized; 4,944 issued and outstanding (5,000 issued and outstanding in 2011) and capital in excess of par value | 19,464 | 17,036 |
Accumulated other comprehensive income (loss) | (399) | (781) |
Retained earnings | 32,138 | 29,656 |
Total stockholders' equity | 51,203 | 45,911 |
Total liabilities and stockholders' equity | $ 84,351 | $ 71,119 |
** These investments are operating assets as they relate to associated companies. (a) Compute Intel's net operating assets (NOA) for year-end 2012. 2012 NOA = $Answer
(b) Compute net operating profit after tax (NOPAT) for 2012, assuming a federal and state statutory tax rate of 37%. Round your answer to the nearest whole number. 2012 NOPAT = $Answer
(c) Use the parsimonious forecast method, as shown in Analysis Insight box on page 13-4, to forecast Ciscos sales, NOPAT, and NOA for 2013 through 2016 and the terminal period using the following assumptions.
Sales growth | 10% |
Net operating profit margin (NOPM) | 20.4% |
Net operating asset turnover (NOAT) at year-end | 1.27 |
Forecast the terminal period value using a terminal period growth of: 1% and the NOPM and NOAT assumptions above.
INTC | Reported | Forecast Horizon | Terminal | |||
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($ millions) | 2012 | 2013 Est. | 2014 Est. | 2015 Est. | 2016 Est. | Period |
Sales (rounded two decimal places) | Answer
| Answer
| Answer
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Sales (rounded nearest whole number) | Answer
| Answer
| Answer
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NOPAT (rounded nearest whole number)* | Answer
| Answer
| Answer
| Answer
| Answer
| Answer
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NOA (rounded nearest whole number)* | Answer
| Answer
| Answer
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* Use sales rounded to nearest whole number for this calculation.
(d) Estimate the value of a share of Intel common stock using the discounted cash flow (DCF) model as of December 29, 2012; assume a discount rate (WACC) of 11%, common shares outstanding of 4,944 million, and net nonoperating obligations (NNO) of $(9,138) million (NNO is negative which means that Intel has net nonoperating investments).
Instructions:
Use your rounded answers for subsequent calculations.
Round all answers to the nearest whole number, except for discount factors and stock price per share.
- Round discount factors to 5 decimal places.
- Round stock price per share to two decimal places.
- Use a negative sign with your NNO answer.
INTC | Reported | Forecast Horizon | Terminal | |||
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($ millions) | 2012 | 2013 Est. | 2014 Est. | 2015 Est. | 2016 Est. | Period |
DCF Model | ||||||
Increase in NOA | Answer
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FCFF (NOPAT - Increase in NOA) | Answer
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Discount factor | Answer
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Present value of horizon FCFF | Answer
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Cum present value of horizon FCFF | Answer
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Present value of terminal FCFF | Answer
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Total firm value | Answer
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NNO | Answer
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Firm equity value | Answer
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Shares outstanding (millions) | Answer
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Stock price per share | Answer
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