CHAPTER 2 The Balance Sheet 103 Case 2.2 Applied Materials Comprehensive Analysi
ID: 2602513 • Letter: C
Question
CHAPTER 2 The Balance Sheet 103 Case 2.2 Applied Materials Comprehensive Analysis Case Using the Financial Statement Analysis Template Each chapter in the textbook contains a continuation of this problem. The objective is to learn how to do a comprehensive financial statement analysis in steps as the content of each chapter is learned. Using the 2013 Applied Materials Form 10-K that can be found at www.pearsonglobaleditions.com/fraser, complete the following requirements: the financial statement analysis template that you saved from the Chapter 1 Applied Materials problem and input the data from the Applied Materials balance sheet. Be sure to read the notes to the financial statements to determine the correct numbers to input on the template. For example, the company has combined asset and liability accounts and property, plant and equipment has been recorded net of accumulated depreciation. See Note 7 to help you reorganize the data for the template. When you have finished input ting the data, review the balance sheet to make sure there are no red blocks indicating that your numbers do not match the cover sheet information you input from the Chapter 1 problem. Make any necessary corrections before printing out both your input and the common-size balance sheet that the template automatically creates for you. (b) Analyze the balance sheet. Write a summary that includes important points that an analyst would use in assessing the financial condition of Applied Materials.Explanation / Answer
IMPORTANT RATIOS:
PROFITABILITY:
LIQUIDITY
LONG TERM SOLVENCY
Applied Materials Annual Income Statement Period Ended 10.29.17 10.30.16 10.25.15 10.26.14 10.27.13 Update Update Update Update Update 12.18.17 12.18.17 10.11.17 10.11.17 10.11.17 In millions of USD (except for per share items) Net Sales 14,537.00 10,825.00 9,659.00 9,072.00 7,509.00 Revenue 14,537.00 10,825.00 9,659.00 9,072.00 7,509.00 Total Revenue 14,537.00 10,825.00 9,659.00 9,072.00 7,509.00 Cost of Revenue 8,005.00 6,314.00 5,707.00 5,229.00 4,518.00 Cost of Revenue, Total 8,005.00 6,314.00 5,707.00 5,229.00 4,518.00 Gross Profit 6,532.00 4,511.00 3,952.00 3,843.00 2,991.00 Selling / General / Administrative Expense 762 800 908 855 834 Labor & Related Expense 68 63 61 58 54 Selling / General / Administrative Expenses, Total 830 863 969 913 888 Research & Development 1,773.00 1,538.00 1,450.00 1,427.00 1,319.00 Amortization of Intangibles 20 22 23 25 33 Depreciation / Amortization 20 22 23 25 33 Investment Income - Operating 41 -64 -197 -47 -18 Interest / Investment Income - Operating 41 -64 -197 -47 -18 Interest Expense (Income), Net-Operating, Total 41 -64 -197 -47 -18 Restructuring Charge -- -- 14 5 63 Impairment-Assets Held for Use -- -- 0 0 278 Impairment-Assets Held for Sale -- -- -- -- 6 Loss(Gain) on Sale of Assets - Operating -- -- -- -- -4 Unusual Expense (Income) -- -- 14 5 343 Total Operating Expense 10,669.00 8,673.00 7,966.00 7,552.00 7,083.00 Operating Income 3,868.00 2,152.00 1,693.00 1,520.00 426 Interest Expense - Non-Operating -198 -155 -103 -95 -95 Interest Expense, Net Non-Operating -198 -155 -103 -95 -95 Interest Income (Expense), Net Non-Operating 61 16 8 23 19 Interest Income (Expense), Net-Non-Operating, Total -137 -139 -95 -72 -76 Net Income Before Taxes 3,731.00 2,013.00 1,598.00 1,448.00 350 Provision for Income Taxes 297 292 221 376 94 Net Income After Taxes 3,434.00 1,721.00 1,377.00 1,072.00 256 Net Income Before Extraordinary Items 3,434.00 1,721.00 1,377.00 1,072.00 256 Net Income 3,434.00 1,721.00 1,377.00 1,072.00 256