Gr oup : bey ond slk

Name : kim yoon tae ,lou qian, Sang Yingkai,

IN-CLASS EXERCISE: Analyzing Income Statement and CFS

Read over the financial tables given below. After analyzing the tables, decide
which company you would prefer to invest in. Be prepared to give your reason.

Intel Corporation is a semiconductor chip maker. The Company is engaged in

developing advanced integrated digital technology products, primarily integrated circuits,
for industries, such as computing and communications. Its primary component products
include microprocessors, chipsets, wired and wireless connectivity. (hoovers.com)

Intel Corp. INCOME STATEMENT 2008 2007 2006

Revenue ($mil.) 37,586.0 38,334.0 35,382.0
Gross Profit ($mil.) 20,844.0 19,904.0 18,218.0
Operating Income ($mil.) 7,694.0 9,181.0 7,092.0
Total Net Income ($mil.) 5,292.0 6,976.0 5,044.0
EPS 0.92 1.18 0.86
STRENGTHS:（Gross Profit）

As can be seen by observing the form, from 2006 to 2008 continued to grow.A
company`s gross profit provides the resources to cover all of the company`s
expenses.Obviously,theNET SALES continued to grow. Minus the cost of sales is still a
larger surplus .And the profit margins was growth.So the Gross Profit was strengths.

WEAKNESSES:(Operating Income and EPS)

As can be seen by observing the form from 2006 to 2008,The Revenue has been
reduced,but Gross Profit continued to grow,and We can clearly see that Operating
Income and Total Net Income has reduced from the form.So Operating Income and Total
Net Income was weeknesses. Operating Income was increased ,the Net Income was
growth.Because of above reasons the EPS was reduced.So the Net Income was
reduced. When calculating,the EPS was the weaknesses.
Intel Corp. CASH FLOW STATEMENT Dec08 Dec07 Dec06
Net Operating Cash Flow 10,926.0 12,625.0 10,620.0
Net Investing Cash Flow (5,865.0) (9,926.0) (4,907.0)
Net Financing Cash Flow (9,018.0) (1,990.0) (6,439.0)
STRENGTHS(The Net Investing Cash Flow)

The Net Investing Cash Flow was strengths. Bacuse it can be seen from the table
to strong, we can know the inventory was very strength . And in this year the Net
Investing Cash Flow have a progress. So we can know the company may be change in
equipment ,assets or investments relate to cash from investing. And made a progress,
Access to income.

WEAKNESSES:( Net Operating Cash Flow and Net Financing Cash Flow)

Net Operating Cash Flow and Net Financing Cash Flow were weaknesses. So we
can know the Operation was bad business and management. And the Accounts Receivable
was reduction and the Accounts payable was increased ,and we can know the inventory
was bad.And financing have a large output . But have a litte input. So we can say the
Net Financing Cash Flow was weaknesses.

Advanced Micro Devices, Inc. is a global semiconductor company with facilities

around the world. The Company offer x86 microprocessors, for the commercial and
consumer markets, embedded microprocessors for commercial, commercial client and
consumer markets and chipsets for desktop and notebook personal computers (PCs),
professional workstations and servers. (hoovers.com)

AMD INCOME STATEMENT 2008 2007 2006

Revenue ($mil.) 5,808.0 6,013.0 5,649.0
Gross Profit ($mil.) 2,320.0 2,262.0 2,793.0
Operating Income ($mil.) (1,980.0) (2,799.0) (17.0)
Total Net Income ($mil.) (3,098.0) (3,379.0) (166.0)
EPS (5.10) (6.06) (0.34)

STRENGTHS:( Gross profit and Operating Income ,EPS)

Gross profit in 2008 increased significantly, which is plus for company’s
profitability. Operating Income in 2008 decreased enormously, which is highly
favorable in view of the large sale increase.Total Income and ESP are significantly
increased,

WEAKNESSES:( Net Income)

Net Income are increased but very negative. The management result of this
enterprise is minus, so tat invests in the stocks of this enterprise, thinks that is not good.

AMD CASH FLOW STATEMENT Dec08 Dec07 Dec06

Net Operating Cash Flow (692.0) (310.0) 1,287.0

Net Investing Cash Flow (27.0) (1,675.0) (4,303.0)

Net Financing Cash Flow 220.0 2,037.0 3,763.0

STRENGTHS(Net Investing Cash Flow)

There is a growth potential because doing a various facility investment in Dec08. So we

can know the company may be change in equipment ,assets or investments relate to cash
from investing. And made a progress, Access to income.

WEAKNESSES:( Net Operating Cash Flow and Net Financing Cash Flow)

This enterprise is insecure because CFO and CFI continuously decreasing. The Net
Financing Cash Flow was weakening. financing have a large output . But have a litte
input. So we can say the Net Financing Cash Flow was weaknesses. And Net Operating
Cash Flow show the Operation was bad business and management.
Conclusions(Investment Analysis):
As an investor, I have to consider the 3 points, firstly, the rate of return of capital, followed
by safety of funds, finally looked at all the company's growth potential and operational
capabilities.
Firstly, the rate of return of capital, although AMD than INTEL greater rate of return, but
we can see that INREL have more stable growth. Even if AMD grew rapidly, but not smooth.
Secondly, at the financial safety, obviously INTEL is Better security .From INCOME
STATEMENT and CASH FLOW STATEMENTcan be seen. INTEL investments more secure
and reliable.
Finally look at the company's development potential and management capacity to run. AMD
have more room for development, but the lack of management capacity, if not timely enough
to improve the development potential. NTEL While development has little potential, but the
management are strong, so the company may be better able to achieve significant progress
and development .
Based on the above reasons, in the light we have chosen to invest in INTEL, because it can
get return on investment and ensure the safety of capital.