Intel 3.16

Intel, Common Size Analysis

All figures in millions in dollars 2007 % 2006 % 2005 %

Net Revenue 38334 100% 35382 100% 38826 100%

less cost of sales 18430 48% 17164 49% 15777 41%

Gross profit 19904 52% 18218 51% 23049 59%

less Operating expense 11688 30% 12566 36% 10959 28%

Operating income 8216 21% 5652 16% 12090 31%

gain /loss on equity investment, net 157 0% 214 1% -45 0%

Interest and other net 793 2% 1202 3% 565 1%

Earnings before taxes 9166 24% 7068 20% 12610 32%

less Taxes 2190 6% 2024 6% 3946 10%

Earnings after taxes 6976 18% 5044 14% 8664 22%

Ratios 2007 2006 2005

Gross profit margin 52% 51% 59%

Net profit margin 18% 14% 22%

The net profit margin was highest in 2005 among all three years. While in other two years it was 18% and 14% in 2007 and 2006, respectively. The main reason of highest profit margin in 2005 was the gross profit margin, which was 59%, while in other two years it is almost same. Another factor of good profit margin in 2005 is the lower operating expense in 2005 as compared to other two years. The operating expense was highest in 2006 among three years, which had lowered the net profit margin in 2006.

Growth 2007 % 2006 % 2005

Net Revenue 38334 8% 35382 -9% 38826

Operating expenses 11688 -7% 12566 15% 10959

The relationship of growth in sales and operating expenses is very contrasting. In 2006, sales had gone down by 9%, but the operating expense went up by 15%. While in 2007, the net revenue had gone up by 8% and operating expenses had gone down by 7%. This behavior resulted in higher profit margin in 2007 as compared to 2006.

Changes in Stockholders Equity 2007 % 2006 % 2005

Common Stock 11653 49% 7825 25% 6245

Other Comprehensive income 261 558% -57 -145% 127

Retained Earnings 30848 6% 28984 -3% 29810

42762 16% 36752 2% 36182

The main reasons for change in common stock in 2006 and 2007 were proceeds from sales of shares through employee equity incentive plans, net excess tax benefit and...