Above are Microsoft's and Google's current ratio, debt to equity ratio, asset turnover ratio, profit margin ratio, ROE and ROA.

1. Please compare the ratios 2017 vs. 2018 for both firms and answer the following:
   1. Did the firms liquidity improve? Why?
   2. Did the firms ability to pay their long-term debt improve? Why?
   3. Did the firms ability to utilize their assets improve? Why?
   4. Did the firms profitability improve? Why?

Current Ratio Current Assets Current Liabilities Microsoft's Current Ratio (2017) = 162,696 / 55,745 = 2.92 Microsoft's Current Ratio (2018) = 169,662 / 58,488 = 2.90 Google's Current Ratio (2017) = 124,308 / 24,183 = 5.14 Google's Current Ratio (2018) = 135,676/34,620 = 3.92 Debt to Equity Ratio Total Liabilities Total Stockholders' Equity Microsoft's Debt to Equity Ratio (2017) = 162,601 / 87,711 = 1.9 Microsoft's Debt to Equity Ratio (2018) = 176,130 / 82,718 = 2.1 Google's Debt to Equity Ratio (2017) = 44,793 / 152,502 = 0.29 Google's Debt to Equity Ratio (2018) = 55,164 / 177,628 = 0.31 Asset turnover ratio Sales Revenue Total (or net)Assets Microsoft's Asset Turnover Ratio (2017) = 96,571 / 250,312 = 0.39 Microsoft's Asset Turnover Ratio (2018) = 110,360 / 258,848 = 0.43 Google's Asset Turnover Ratio (2017) = 110,855 / 197,295 = 0.56 Google's Asset Turnover Ratio (2018) = 136,819 / 232,792 = 0.59 e) Profit Margin - The net profit margin is equal to how much net income or profit is generated as a percentage of revenue. Net profit margin is the ratio of net profits to revenues for a company or business segment. Net profit margin is typically expressed as a percentage but can also be represented in decimal form. Profit Margin Ratio = Net Profit Revenue x 100 Microsoft's Profit Margin Ratio (2017) = (25,489 / 96,571) x 100 = 26% Microsoft's Profit Margin Ratio (2018) = (16,571 / 82,718) x 100 = 15% Google's Profit Margin Ratio (2017) = (12,662 / 110,855) x 100 = 11% Google's Profit Margin Ratio (2018) = (30,736 / 136,819) x 100 = 22% ROE = Net Income x 100 Shareholders' Equity Microsoft's ROE (2017) = (25,489 / 87,711) x 100 = 29% Microsoft's ROE (2018) = (16,571 / 82,718) x 100 = 20% Google's ROE (2017) = (12,662 / 152,502) x 100 = 8.3% Google's ROE (2018) = (30,736 / 177,628) x 100 = 17% Net Income ROA = x 100 Total Assets Microsoft's ROA (2017) = (25,489 / 250,312) x 100 = 10% Microsoft's ROA (2018) = (16,571 / 258,848) x 100 = 6.4% Google's ROA (2017)= (12,662 / 197,295) x 100 = 6.4% Google's ROA (2018)= (30,736 / 232,792) x 100 = 13%