Free Financial Statement Analysis Essay Sample
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Intel Corporation and Advanced Micro Devices are the two leading manufacturers of computer processors. The below analysis is intended to provide a performance report of both companies, based on their 5 year historical financial statements.
In the past three years, between 2008 and 2010, Intel has increased its net revenue by over 20 percent overall. It is important to note that there was a dip in the figures in 2008 and 2009. In the first quarter of the year, Intel has taken the lead from AMD in the CPU market again, thanks to the higher operating income and the significant increase in the gross margin in the past three years. This enabled the company to create a strategy which consists of reducing its operating expenses. The company has spent significantly more for research and development in 2010, enabling the competitive advantage to take place on the fast developing marketplace.
Advanced Micro Devices
Throughout 2010, the market share of AMD in the processor industry has tumbled further, quarter by quarter. It looks like the company is not able to keep up with the stronger than ever Intel corporation. We can see a tendency that the company is working on increasing its revenue, however, the costs of operation are not reduced, indeed, they have gone up in 2010 compared to the previous years. This disallows the gross profit to increase at a rate Intel’s. Furthermore, it is important to note that while Intel was able to allocate more resources to research and development to stay competitive on the market, these expense figures have gone down at AMD, indicating a lower rate of innovation within the company. This needs to be turned over to provide AMD a chance to increase its just over 10% market share on the chip market.