Ratio analysis—comprehensive problem, 2008 data This problem is based on the 2008 annual r...

Ratio analysis—comprehensive problem, 2008 data This problem is based on the 2008 annual report of Intel Corporation in the appendix.

Required:

a.Compute the following profitability measures for the year ended December 27, 2008:

1. Return on investment, based on net income (perform a DuPont analysis).

2. Return on equity, based on net income.

3. Price/earnings ratio. Use $14.18 as the year-end market price.

4. Dividend yield.

5. Dividend payout ratio.

b. Compute the following liquidity measures at December 27, 2008:

1. Working capital.

2. Current ratio.

3. Acid-test ratio.

c. Compute the following activity measures for the year ended December 27, 2008:

1. Number of days’ sales in accounts receivable, based on a 365-day year.

2. Number of days’ sales in inventory, based on a 365-day year.

3. Accounts receivable turnover.

4. Inventory turnover.

5. Turnover of net property, plant, and equipment.

d. Compute the following financial leverage measures at December 27, 2008:

1. Debt ratio.

2. Debt/equity ratio.

e. Compute the following physical measures of Intel’s profitability at December 27, 2008:

1. Net revenues per employee.

2. Operating income per employee. (Hint: The number ofemployees at year-end is disclosed on page 685 of the Intel annual report in the appendix.)