Intel - Accounting Analysis Project

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To improve our understanding of accounting concepts and become familiar with the contents of a company’s annual report (Form 10-k), and the proxy statement (DEF 14A) which are both filed with the Securities and Exchange Commission (SEC). Scope:

The team shall lead a class discussion for Intel Corporation 2010, with an analysis of Intel’s profitability. In addition to the presentation, a written report will be submitted onto Blackboard by May 2, 2011. The report shall contain the answers to the questions in the project handout. Conclusion:

Through our analysis of Intel’s financial documents, there have been a number of specific items that have expanded our experience in understanding the concepts of accounting principles using a real world example. To elaborate, details of Intel’s supply chain has helped us understand the complexity of profitability and the multiple layers of risks involved based on environment, politics, natural, cultural, and technological factors. In addition, real world usage of financial and accounting forms including the 10-k, SEC Form DEF14A (Securities and Exchange Commission) help identify a granular level of the financial situation of said company. Furthermore, the multi level complexity of assets, liabilities, and stockholder’s equity deduce the day-to-day transactions of one of the largest companies in the world into understandable and workable means. Finally, the analysis of Intel’s financial statements gives us an expanded understanding and detailed interpretation of accounting concepts learned in class.

I.Background information
a.Name of the company?
The name of the company is Intel Corporation. (Intel Annual Report 2010, Cover Page) b.Fiscal year covered by the annual report?
The fiscal year covered by the annual report is year 2010. (Intel Annual Report 2010, Cover Page) c.Stock exchange where shares are traded and stock ticker symbol? Intel’s Symbol is INTC. The stock exchange for Intel is NASDAQ. (Intel Annual Report 2010, 107) d.State of incorporation?

Intel was incorporated in California in 1968 and reincorporated in Delaware in 1989. (Intel Annual Report 2010, 1) e.Describe the company’s business e.g., types of products manufactured? Intel manufactures the following types of products: microprocessors, chipsets, wired and wireless connection products, and motherboards. •Microprocessors are known as the central processing unit of the computer. It processes data on all platforms such as laptops, desktops, phones, Video games consoles etc. •Chipsets are like the nerves of the computer, it is the passage way for signals from your devices such as keyboards and mice to the CPU or Central Processing Unit (Microprocessor). •The Mother board is the component where the CPU and Chipset reside on. This part of the computer is also where you connect other devices to such as CD/DVD ROMs, memory, video cards, audio cards, etc. It’s basically the body of the PC or device. (Intel Annual Report 2010, 2, 4)

f.What are the Company’s major corporate values?
Intel is the world’s largest semiconductor chip maker based on its sales worldwide. Intel strives to bring customer value and satisfaction through its unique architecture that goes into its products, thus providing customers with a satisfying and pleasant experience when using technology with the Intel logo. (Intel Annual Report 2010, 1)

II.Audit Report
a.Who are the company’s auditors?
Ernst & Young LLP is Intel’s independent registered public accounting firm. (Intel Proxy Statement 2011, 46) b.What opinion did the auditors issue?
The auditors mentioned that all the financial statements are fair and in conformity with GAAP (Generally Accepted Accounting Principles). (Intel Annual Report 2010, 105) c.Did the auditors examine all the evidence supporting the amounts and disclosures in all of the financial statements? Explain. The auditors examined all the financial statements...
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