Consider the financial data for Alphabet Inc. and Microsoft Corp. for the fiscal year 2022:

($ millions)	Alphabet Inc.	Microsoft Corp.
Net sales	$257,637	$198,270
Cost of sales	125,674	80,754
Gross profit	131,963	117,516
Operating expenses:
Selling, general, and administrative (SG&A)	70,831	33,890
Research and development (R&D)	26,982	22,315
Operating income	34,150	61,311
Interest and other (income) expense	4,305	2,435
Interest and investment income	(1,606)	(1,482)
Earnings before provision for income taxes	31,451	60,358
Provision for income taxes	9,435	14,217
Net earnings	$22,016	$46,141

Required:

1. Compute the return on equity (ROE), return on assets (ROA), and return on financial leverage (ROFL) for each company in fiscal year 2022. Assume a tax rate of 28%.
2. Disaggregate the ROA into profit margin (PM) and asset turnover (AT) components. Identify which factor drives the ROA for each company.
3. Assess the trend in SG&A expenses over the past five years. What does it indicate about each company’s operational efficiency?
4. Evaluate the current ratio and quick ratio for Alphabet Inc. and Microsoft Corp. What does it reveal about their short-term liquidity?
5. Compare the net profit margins of Alphabet Inc. and Microsoft Corp. What insights can be drawn about their profitability?