Question

i need help on finding

Compute the financial ratios based on financial statements of Intel (Exhibits 38.2 and 33.3 on pp. 3-40 and 3.41. 1) Profit Margin 2) Total Asset Turnover 3) Return on Assets 4) Financial Leverage 5) Return on Equity

need help on finding the rations 1-5.

Answer 1

The ratios can be calculated in the following manner:

Ratio	Formulae	2015	2014
Profit Margin	Net Income/Net Sales	20.63%	20.95%
Assets Turnover Ratio	Net Sales/Average Total Assets	56.78%	60.64%
Return on Assets	Net Income/Total Assets	11.71%	12.70%
Financial Leverage	Average Total Assets/Average Equity	1.67	1.61
Return on Equity	Net Income/Average Equity	19.53%	20.51%

Explanation

There are different ways and formulae how these ratios can be calculated. The above method is just 1 way of solving these. In case of any issues, please drop a comment

Ratio Formulae Profit Margin Net Income/Net Sales Assets Turnover Ratio Net Sales/Average Total Assets Return on Assets Net Income/Total Assets Financial Leverage Average Total Assets/Average Equity - Return on Equity Net Income/Average Equity 2015 =11420/55355 =55355/((103065+91900)/2) =11420/((103065+91900)/2) =[(103065+91900)/2)/((61085+55865)/2) =11420/((61085+55865)/2) 2014 =11704/55870 =55870/((91900+92358)/2) =11704/((91900+92358)/2) =((91900+92358)/2)/((55865+58256)/2) =11704/((55865+58256)/2)

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