Category: Intel

Intel Corporation: Financial Statement

Posted on | by Laureen

Intel Corporation is one of the largest companies worldwide that manufacture semiconductor chips. Founded in 1968 by Robert Noyce and Gorgon Moore, the company has its headquarters in Santa Clara, California (O’Regan, 2021). The firm is also x86 microprocessor developers, found in most personal computers. The corporation supplies microprocessors to companies such as HP, Lenovo, Dell, and Acer. The company produces and sells integrated circuits, motherboard chipsets, graphic chips, and other computing and communication gadgets.

Revenue for the company has been growing over the years. Intel recorded a gross profit of $79.02 billion in the fiscal al year 2021 (Yahoo!, 2022). The revenue of Intel has been increasing due to its growth of data-centric segments and the strong economy. Intel corporation has also grown in the Client Computing Group. The business experienced growth in demand for high-performance devices especially. Income for the company was also increased in 2017 due to the tax reforms that occurred in that year. Its income has increased by 84% since 2015 as the tax for corporates has decreased. After the decrement, the company used 86% of its finances to add to its equipment, plant, property and buy trading stocks (Yahoo!, 2022). As a result, the company’s gross profits are greater than the industrial average. The company continues to grow and is forecasted to have a 3% increase by the fiscal year 2024.

Taiwan Semiconductor Manufacturing Co. is the biggest competitor of Intel Corporation. TSMC uses a 3- nanometer tech to manufacture its chips, an advanced technology. By the year 2020, the revenue for TSMC increased by 25.2 percent to a value of 47.268 billion Dollars (Wang & Lin, 2021). This statistic indicates that the company generates twice as much revenue as Intel Company. The company is also interested in increasing its capacity in the coming years (Wang & Lin, 2021). TSCM is building a chip plant in Arizona worth $ 12 billion, which is supposed to be opened in 2024, threatening the market for Intel Company.

Advanced Micro Devices, Inc. is another major competitor for Intel Corporation. Computer integrated circuits are the primary focus of AMD, a technological company located in the United States. According to the company’s forecast, a 45 percent rise in sales is predicted for AMD in 2020, to a value of $9.76 billion from $6.73 billion (Sousa et al., 2021). In 2020, the profits rose to 63 percent, with a quarter-over-quarter growth of 94.8 percent (Teles, 2020). Intel’s market share surpassed 71.58% by June 2021, making AMD obsolete. AMD powers 28 percent of all gaming consoles (Sousa et al., 2021). It has a market share of 20.5 percent, making it the second-largest processor manufacturer in the world. AMD is Intel’s main competitor and a potential alternative.

Intel Corporation is a company that has business interests in foreign countries. Being a multinational company, the company has one hundred and seventy-three offices across thirty-six countries, such as Sweden, Canada, Belgium, Austria, Netherlands, etc. (Gereffi et al., 2019). The company has 121100 full-time employees across different countries (Yahoo!, 2022). The company has its roles in developing and supporting industrial innovations and diversity worldwide. The company has a significant economic influence on the countries it operates.

Accounting policies refer to ideologies and practices used by entities to identify, evaluate and re-count economic transactions. They provide a representation of a company’s financial status and performance. Any misrepresentation of the financial position of a business due to poor accounting policies create a negative reputation for an organization because users are likely to receive incorrect and inappropriate accounting information (Lugovsky & Kuter, 2019). Companies choose accounting policies to serve their business interests as per the management’s opinion using the best suitable methods to present financial position in an absolute and reasonable manner. Business interests influence accounting policies when an organization has to ensure the company’s difficulties do not affect the representation of its financial position. The policies should conform with generally accepted accounting principles (GAAP) and be accessed for the quality of earnings. If a company wants its great financial status to appear great, it can easily use accounting policies to manipulate earnings legally. For example, while using the average cost methodology, the inventory weighted average cost determines the cost of goods sold (COGS) after sales are made.

For the significance of financial reporting, the Intel Company uses a one-month accounting cycle. There are several steps involved in this form of the accounting cycle. The company first identifies transactions and is properly recorded in the company’s books. Next, the company creates a journal entry for all the transactions and tracks expenses. The company then posts the entry in the general ledger that summarizes the accounting activities (Faccia et al., 2019). The company then does a trial balance to inform the company of the unadjusted balance. The unadjusted trial balance is then forwarded to analysis and testing to ensure equal balancing of debit. Journal entries are then adjusted and recorded as necessary. After adjustment, the financial statement is generated. The final step of the cycle involves the closing of books and a closing statement that provides a report of analysis carried out over the period.

Bad debt expense refers to receivables that a company cannot collect due to a customer’s inability to meet debts caused by financial difficulties. The spending of money on bad debts, known as doubtful commitments, is recorded as a negative transaction in a company’s financial records. For example, Intel Corporation has a bad debt expense of 10 million Dollars (Yahoo!, 2022). Each firm has its method for classifying outstanding accounts as bad debts, and each system is different from the other.

Revenue recognition is a quantitative accounting problem for Intel because of the wide range of business areas and end consumers it serves. Intel, for example, recognizes revenue on direct-to-consumer sales immediately following delivery. Until the distributors sell the goods, Intel holds onto the revenue and expenditures connected with its products for resale. To keep distributor profit margins stable in the face of industry price cuts and rapid technological obsolescence. Licensing agreements, especially with McAfee, are other ways for Intel to make money (Goel, 2019). Contracts like this create income that accrues and is recognized during the contract’s duration. A comparable delay and recognition of Intel’s subscription-based online products revenue occur throughout the subscription period. When services are completed, revenue is reported for Intel professional services. This process complicates revenue reporting since Intel has a wide variety of connections that may be attributed to a single customer. In these cases, revenue is distributed across the specific deliverables and may be recognized immediately or later.

In conclusion, investigating a company’s financial health is essential for making informed investment decisions. Intel Corporation uses first-in, first-out inventory methods, which is efficient for the company as it is short-lived for the semiconductor product to manufacture. In this form of inventory method, the assets that are acquired first are the ones that are disposed of first. It also assumes that the inventory is constituted of items that were last purchased. There is low-income manipulation, and the method assumes the cost flows with general goods’ physical flow. The company utilizes the first-in, first-out inventory, which makes the company have obsolete inventories. The company should implement the last-in, first-out inventory method to maximize its profits during high inflation.

References

Faccia, A., Al Naqbi, M. Y. K., & Lootah, S. A. (2019). In Proceedings of the 2019 3rd International Conference on Cloud and Big Data Computing (pp. 31-37). Web.

Gereffi, G., Frederick, S., & Bamber, P. (2019). Transnational Corporations, 26(1), 1-30. Web.

Goel, S. (2019). In Eurasian Business Perspectives (pp. 95-106). Springer, Cham. Web.

Lugovsky, D., & Kuter, M. (2019). Accounting policies, accounting estimates and its role in the preparation of fair financial statements in digital economy. In International Conference on Integrated Science (pp. 165-176). Springer, Cham. Web.

O’Regan, G. (2021). In A Brief History of Computing (pp. 89-96). Springer, Cham. Web.

Sousa, B., Alves, C., Mendes, M., & Au-Yong-Oliveira, M. (2021). In 2021 16th Iberian Conference on Information Systems and Technologies (CISTI) (pp. 1-7). IEEE. Web.

Teles, F. S. (2020). Equity research–advanced micro devices (AMD) (Doctoral dissertation).

Wang, C. H., & Lin, H. C. (2021). CAdvanced Engineering Informatics, 48, 101254. Web.

Yahoo! (2022). I Yahoo! Finance. Web.

Toyota, Caterpillar, Intel and Ford: Lean Manufacturing

Posted on | by Laureen
  1. Lean Manufacturing: Toyota
  2. Lean Manufacturing: Caterpillar
  3. Lean Technologies: Intel
  4. Lean Manufacturing: Ford
  5. Works Cited

Lean Manufacturing: Toyota

Toyota’s manufacturing approach is the most prominent example of Lean since the company’s founder was the first to develop the system. The Toyota Production System (TPS) has embraced the philosophy of the “complete elimination of all waste imbuing all aspects of production in pursuit of the most efficient methods” (“Toyota Production System”). Prior to establishing the system, Toyota has worked on continuous improvements and ensuring that customers get their vehicles in the most efficient and the quickest way possible (“Toyota Production System”).

TPS incorporates the two Lean concepts: Jidoka and Just-in-Time. The former implies the elimination of defective products by stopping equipment as soon as an error occurs. The latter is associated with producing only what is needed within a continuous manufacturing flow.

It is essential to note that the TPS is a socio-technical system that pays a great deal of attention to respect for employees and teamwork (“Toyota Production System”). This means that Toyota’s Lean system is more than just an approach to manufacturing – it is a social philosophy in which the mutual trust between workers and personal growth is stimulated. Unlike other companies that are wary of any advancements, the TPS is welcoming of change because it encourages the company to improve and adapt.

The TPS incorporates a range a set of underlying principles, otherwise known as the Toyota Way. They include continuous improvement, respect for workers, long-term philosophy, producing the right results with the right processes, adding value, and organizational learning. The combination of the mentioned principles makes it possible for Toyota to reduce the errors in construction, reduce waste, and foster a positive environment in which workers are valued and supported.

Lean Manufacturing: Caterpillar

Caterpillar (CAT) is among the leading producers and constructors of mining machinery, natural gas and diesel engines, diesel-electric locomotives. It has also differentiated the business into producing travel accessories and footwear. The Caterpillar Production System (CPS) has been established for monitoring the quality of manufactured products, meet the established cost goals, retain staff, and reduce waste (“Continuous Product Improvement”). Based on the TPS framework, CPS also incorporates such concepts as Poka Yoke, pull production, continuous improvements, and numerous others. Importantly, CPS is implemented not only in factories but also at stages of product design and development, supply chain management, and purchasing.

The integration of CPS allowed the company to reach unprecedented results. Between 2004 and 2008, “Caterpillar capitalized on the economic boom,” with sales and revenues topping $51 billion, “exceeding the 2010 goal of $50 billion much ahead of schedule” (“Analyzing the Caterpillar Production System”). Even during the downturn of 2009-2010, CAT managed to reach its objectives through the implementation of CPS. In 2010, the company increased its revenues by 31% compared to 2009 and earned $42.59 billion while its profit per share was $4.15 in 2010 compared to $1.43 in 2009 (“Analyzing the Caterpillar Production System”).

In product design, the CPS is used for continuous innovation and adaptation to the needs of customers and the environment. In demand management, the system allows to make unbiased predictions and act in regards to maximizing the value delivered to customers. In quality management and process planning, the CPS is instrumental in delivering defect-free products and specifying the resources needed for improving the quality. Incapability building, the CPS maintains workplace values and enables the company to ensure the development of appropriate skills.

Lean Technologies: Intel

Intel is the key company supplying computer processes to such giants as HP, Dell, Apple, and Lenovo, and the scope of manufactured parts does not end there. In the recent decade, Intel has invested in the development of Lean solutions not only for increasing its manufacturing capabilities but also for reducing waste on such stages as Research and Development (R&D). When implementing Lean methodologies, Intel managed to eliminate waste “by reducing the idle time experienced by the researchers and engineers who implement the change while reducing the business process variation simultaneously” (Panat et al. 457).

Particularly, Intel implemented Lean Six Sigma (LSS), which established a systematic approach to R&D along with the assessment of the present state through planning a process, preparing a map to identify inefficiencies and waste, defining a realistic objective, taking actions for improvement, and documenting outcomes (Panat et al. 457). In terms of the real results of LSS integration, Intel reduced waste and idle time by 60%. Along with this outcome, the rate of stakeholder satisfaction increased without the need to compromise the technical accuracy during manufacturing.

When it comes to specific products, the manufacturing of microchips at Intel’s facility in Leixlip, Ireland benefited from the system. It made it possible for the company to reduce waste and set-up times and therefore reduce costs in the manufacturing of microchips. By introducing Lean, Intel developed to support not only for the company overall but also for its separate departments in Ireland. The support of a Lean system was important because without its implementation, up to twenty-five different product lines involving three hundred steps had to be managed.

Lean Manufacturing: Ford

While Lean manufacturing was first developed at Toyota, there are similarities of the system established at Henry Ford’s line assembly and manufacturing process. The key idea behind the Ford manufacturing system is the establishment of a standardized product that leads to the performance of standard processes. This guarantees that workers’ training is easier, and the procedures within the plant are optimized to meet the appropriate standards. With the introduction of the moving assembly line, the manufacturing takes place the way Ford expects; for example, workers can easily adapt to the speed of the conveyor without too much training or time.

Therefore, the Ford Lean system implies the harmonization of the work of machinery and employees. The Ford Production System (FPS) brought employees, materials, and mechanical resources in a timely manner to accomplish the established goals by reducing waste, costs, and fostering continuous improvement. The FPS was adopted in all FPS plants, and the company estimated that its savings would add up to $500 million per year (“What is the Henry Ford Production System?”).

Ford’s system is continuously pursuing perfection in all aspects of its business. From policy deployment to daily management, Ford integrates Lean principles every day. The FPS combines tools of improvement, cultural philosophy, and management subsystems. In regards to tools of improvement, they include mistake-proofing, Kanban, Just-in-Time, pull production, the 5S, load leveling, and visual workplaces.

As to the cultural philosophy, Ford engages in blameless management, continuous improvement, the development of people resources, and orientation on customers. Management SubSystems include such aspects as Quality Management Systems, team leader systems, Hoshin planning, coaching and human development, audit systems, and several others that make it easier to differentiate the objectives of various departments.

Works Cited

“” Opsmgt Edublogs. 2013. Web.

“Continuous Product Improvement.” CAT, 2018. Web.

Panat, Rahul et al. “The Application of Lean Six Sigma to the Configuration Control in Intel’s Manufacturing R&D Environment.” International Journal of Lean Six Sigma, vol. 5, no. 4, 2014, pp. 444-459.

“” Toyota-Global, 2018. Web.

“” Henryford, 2018. Web.