Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 31

Calculate profitability measures using annual report data Using data from the financial statements of Intel Corporation in the appendix, calculate

a.ROI for 2008. Round your percentage answer to one decimal place.

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b. ROE for 2008. Round your percentage answer to one decimal place.

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c. Working capital at December 27, 2008, and December 29, 2007.

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d. Current ratio at December 27, 2008, and December 29, 2007. Round your answers to one decimal place.

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e. Acid-test ratio at December 27, 2008, and December 29, 2007. Round your answers to one decimal place.

Note: Visit www.intel.com to update this problem with data from the most recent annual report.

Step 1 of 5

a.

ROI = Margin * Turnover

        = (Net income / Net revenues) * (Net revenues / Average total assets)

        = ($5,292  /  $37,586) * ($37,586  /  (($55,651 + $50,715) / 2))

        = (14.1% Margin * 0.71 turnover)  =  10.0%