Analysis of liquidity and profitability measures of Motorola, Inc. The following summarized data (amounts in millions) are taken from the December 31, 2006 and 2005, comparative financial statements of Motorola, Inc., a manufacturer of wireless communication devices, semiconductors, and advanced electronic systems;

At December 31, 2004, total assets were $30,922 and total stockholders’ equity was $13,331.
Required:

a. Calculate Motorola, Inc.’s working capital, current ratio, and acid-test ratio at December 31, 2006 and 2005. Round your ratio answers to two decimal places.

b. Calculate Motorola’s ROE for the years ended December 31, 2006 and 2005. Round your percentage answers to one decimal place.

c. Calculate Motorola’s ROI, showing margin and turnover, for the years ended December 31, 2006 and 2005. Round your calculations to two decimal places.

d. Evaluate the company’s overall liquidity and profitability. Comment specifically on the difficulties you have encountered in evaluating ROI and ROE for 2005.

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(Amounts Expressed in Millions) For the Year Ended December 31 Net sales..... Costs of sales.. 2006 2005 $42,879 30,152 $35,262 23,833 Operating earnings. Net earnings.. At December 31 Assets Cash and cash equivalents. Sigma funds.... Short-term investments. 4,092 4,605 $ 3,661 $ 4,578 $ 3,212 12,204 $ 3,774 10,867 224 144. Accounts receivable, net. 7,509 5,652 Inventories, net.... 3,162 2,422 Deferred income taxes, current. 1,731 2,355 Other current assets ... 2,933 2,496 Property, plant, and equipment, net. 2,267 2,020 Investments.... 895 1,644 Deferred income taxes, noncurrent 1,325 1,196 Other assets 3,131 2,597 Noncurrent assets held for sale.. 323 Total assets. $38,593 $35,802