Intel

What is the name of the company? What is the industry sector?

The name of the company that I will be working on is Intel Corporation which was founded in July 18th 1968. This company is headquartered in California and is the world’s largest and highest valued semiconductor chipmaker based on revenue. Intel also makes motherboard chip sets, network interface controllers and integrated circuits, flash memory, graphic chips, embedded process and other devices related to communications and computing.

What are the operating risks of the company?

Operating risks for this company would be developing a product that will not be marketable. It has to invest in a substantial amount in research and development to keep up with rapidly changing technology. For example, if laser based circuits get invented, existing electricity based chips may become obsolete. Also, there is changes to product demand which in turn would affect their profits. Competition, market acceptance of products, training employees in a very high skilled environment and losing them to competition, management changes risks, lawsuits and global operations.

What is the financial risk of the company (the debt to total capitalization ratio)?

This number I have taken directly from the company’s financial reports (msn.com) and it was .16(16.09). This is a low debt to equity ratio and is attractive to investors since it shows that they are conservative in financing its growth with debt. If it had a high debt to equity ratio, it would mean they could possibly generate more earnings since debt is tax deductible, but debt at some point may become too much for a company to handle, in which case, it would drive the company into bankruptcy, leaving the shareholders with nothing. Intel is below its industry standards of debt to equity ratio.

Does the company have any preferred stock?

The company does not have any preferred stock. 50 shares of Preferred Stock was authorized but not have been issued.

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