The management of any company is required by the government to give some details by filling what is commonly known as a 10-k statement which shows the financial position of the involved company. Usually, item seven of the 10k statement emphasizes the operations of the company in a detailed manner. The management involved gives a detailed account of the company by consequently comparing the past, present and expected future conditions. The detailed comparisons are to be used as a guide to the general public that may be interested in investing in such companies and hence have a general overview on the operational issues that will enable them to analyze the causes of the increments or the decrements in the output and input of the company. Intel’s 10-k filling is one of the models which can be used to show how the company is committed to having a good public and private relationship. This research paper tries to bring out how the financial presentation is used in investor information and how financial analysis is used to make future company decisions with regard to Intel Company.
Intel’s Use of financial information
Intel’s presentation of its financial information has severally shown out how it is used to inform investors on the current situations with reference to its financial position. The investor companies working in collaboration with Intel include Digital Enterprise Group, Mobility Group, Flash Memory Group, Digital Home Group, Digital Health Group, and the Channel Platforms Group (Rogers et al, 2000).
For instance, this financial information has consequently analyzed the share-based compensation. This report quotes that the share-based compensation amounted to about $ 1.4 billion in the year 2006 compared with the previous years 2005 and 2004. This implies that the company was financially upgrading. This may be a way of communicating to investors who will have more confidence in investing in this company.
The company has equity incentive plans geared at preventing further company risks. Consequently, there are no share-based compensations that are guaranteed in addition to the insignificant amounts. Moreover, the share-related compensation is concurrently featured in the net income of the company’s financial information (Pamela Peterson Drake, 2009). The company on its part says that the operation is mainly aimed at increasing efficiency. Much spending occurs in the sections of research and development which are seen as the major area that helps in new product design and market research in general.
The report establishes that the company increases the R&D spending and at the same time increases the marketing and administration expenses (ML Watson). Moreover, the restructuring and the assets impairment costs decreasing means that investors can have confidence investing in such a company. The outcome reflects the company’s aim at improving operational efficiency and at the same time reducing the company’s financial spending. The income tax rate had decreased highly in the 2006 period in comparison with the previous year 2005. This was attributed to the increased profits as a result of the export increase. This is of significance to the investing team which shall view this fact as an encouraging factor to increase their ventures in the Intel company. The liquidity and the capital resources increased leading to the consequent increase in the financial status that can be viewed as concrete.
The financial information presented by Intel Company can be used to serve as an advisory element in the internal decision-making of the company respectively. The company uses several financial analyses to derive its internal decisions that may be used to create a better self with enormous profits. The cost of the operating activities is one of the major considerations while making internal decisions. Expenditures on operations such as research activities, communication and marketing strategies can be used to estimate the production costs and at the same time ascertain the number of human resources to be recruited by the company. Financial spending is of much consideration in any organization especially with regard to internal decision making. The estimated cash inflow and outflow determine the direction of the financial movement of any organization (Jonzu links). The Company discovered that it had lower financing activities due to the fact that the employee equity had decreased. However, higher cash spending may arise as a result of a purchase increase. Thus Intel uses the financial report to ascertain the need and efficacy of increasing the number of employees and the production advancements to be established. The employee equity incentives provided by the company are used to make decisions geared at permanently retaining experienced workers who may be a great asset with lots of skills that can improve the production of the company. At the same time if the incentive plans improve the performance, then the company may opt to increase the spending towards the incentive plan (Study-aids).
The financial statement is one of the important factors used to influence the relationship between the company and potential investors. With regard to Intel, the financial statement is not only a measure of the company’s [email protected] Ú.
- Rogers et al, Best practices: providing financial information 2000.
- M. L. Watson. Publishing Financial information.
- Jonzu links, Intel Corporation.
- Study- aids, Industrial analysis: Intel Corporation.