Good Example Of Research Paper On Describing The Company’s Portfolio
There are two important types of well beings that have worth for a company as far as their long run and sustainability is concerned, which are strategic well being and financial well being. The real productivity of an organization depends upon the fact that how effectively an organization takes up the charge to manage the prosperity of both of these kinds. It is found that the upper management has to play their active role and part to manage the aforementioned well beings for the enterprises. The c=major objective of this paper is to analyze the financial capability of Intel Corporation. However, there are four different parts that have to complete accordingly to complete this particular assignment is an organized manner.
Analysis & Findings
Intel Corporation is an American based multinational corporation that has its main location at California, the United States of America. Intel is well renowned in the entire world and the largest chip and semiconductor maker. It is also known as a powerful company in terms of management and recognition of revenues. Intel is known as the inventor of the X86 Series of the Microprocessor. It is the same processor that found commonly in most of the personal computers around the globe.
It is one of the largest organizations of the world and most productive as well, and it has been referred as the 100 most valuable brands of the world. One of the best things that associated with Intel Corporation is its high Product Portfolio. There are number of products that currently owns by the company like Bluetooth Chips, Motherboard, Flash Memory, Microprocessor, Network Interface cards and Chipsets. Apart from that, Intel Corporation has now entered in the industry of Mobile Phone manufacturing. The portfolio of the company is powerful, strong and extremely broad, and this transform as an important thing for their business. The company manages to report net revenue of US$ 52.708 billion in the financial year 2013. Currently, there are more than 100,000 brains are working with the company, which are creating and brining new innovations towards the company to further strengthen their operations.
Goals Set by Organization
Intel Corporation is one of the largest and most sophisticated organizations of the world, which are aiming to maintain their strategic position for a long span of time in the market. There are certain goals that specifically made by the management of Intel Corporation, and the company is trying to figure out the things completely to comply and complete their objectives.
One of the basic goals that introduced by Intel is to stay competitive in the market, and they are doing their best to accomplish this goal by innovating effective and technologically sound products in the market. Intel is in the market of manufacturing Chipsets and Semiconductors and continuous change and development is more than important for them, and fortunately the company is maintaining their significance with zeal. Secondly, the company has a goal to retain their key employees with them for a definite time period. The main reason behind the same activity is that retaining the key employees is extremely essential and worthwhile for the competitive positioning of an organization, in fact the real productivity of an enterprise lies on the fact that how beautifully and effectively they manages their entire operations. The company has been trying to retaining their employees by offering intrinsic and extrinsic rewards to them that can satisfy their needs and help out the company to maintain their significance in the market.
In order to dominate in the technological industry, Intel Corporation has to take good care of the aforementioned things and should consider them for the rest of their operations.
The performance of an organization can be found with their ability to maintain their revenue recognition and net income provision. In this part, the financial performance of Intel Corporation will be analyzed just to have a strong monitoring over the performance of the company in the year 2013. The net revenue that generated by Intel Corporation in that year was US$ 52,708 million, while it was US$ 53,341 million a year before, showing a slight decrease in the net revenue by 1.2% in the financial year 2013.
Apart from the revenue, the Gross Profit Margin (GPM) of the company had also decreased to a level of 59% in the financial year 2013 which was nearly to a level of 62% in the year 2012, because of the high cost to goods sold to revenue ratio in the current year. In the preceding year, the cost to goods sales ratio to sales of the company was nearly 38%, but now it is above 40%, showing the inefficiency of the company in terms of managing their operational cost. A drastic affect is found on the operating income of the company. The operating income of Intel Corporation decreased by almost 16% in the year 2013 as compared to the operational income in the same period of last year, which is another important factor that found against the favor of the management
Net profit Margin is an important financial ratio tool that used to analyze the profit making stance of a company. The Net Profit Margin of Intel Corporation in the year 2013 was 18.24% which was nearly 21% in 2012 due to the decrease of net income by 14.3%. It is clearly showing the inefficiency of Intel Corporation in terms of managing their organization and its economic capability.
After having a critical analysis of the income statement and the balance sheet, it is clearly found that the performance of the management of Intel Corporation was not satisfactory in the year 2013, because of decreasing profit margins and increase cost to sales ratios. The management has shown their inefficiency in terms of managing the operational assets and shareholders’ equity of the company, which is one of the most important elements that count under the productivity of an enterprise. This analysis changed the view a bit of the investors who are wishing to park their money in the stocks of the company.
DuPont Equation Analysis of Intel Corporation
DuPont is an important measurement that used by the Financial Analysts to analyze the effectiveness of an organization. The equation of DuPont of the company is as follows
Profit Margin = Net Income / Sales
According to the figures of the year 2013
Profit Margin = 9,620 Million / 52,708 Million = 18.25%
Total Asset Turnover = Sales / Total Assets
= 52,708 million / 92,358 Million = 57.08%
Equity Multiplier = Assets / Equity
= 92,358 Million / 58,256 million = 1.58
The DuPont Equation will be
= 18.25% * 57.08% * 1.58
ROE = 16.45%
Samsung Electronics and Texas Instruments are some of the major competitors of Intel Corporation; however both of the companies have a lesser ROE for their companies. Samsung has a ROE of 14.5% while it is 14% for Texas Instrument. However, the industry average ROE is 12% and all of these three companies are complying with the industry average particularly.
Conclusion and Recommendations for Improvement