Question 1: Assess the changes in the short-term liquidity risk of Sun during the three-year period and the level of that risk at the end of Year 12. Six to eight sentences should be enough.

Question 2: Assess the changes in the long-term solvency risk of Sun during the three-year period and the level of that risk at the end of Year 12. Three or four sentences should be enough.

Risk Ratios for Sun Microsystems Year 12 Year 11 Year 10 1.5 1.5 1.1 0.9 43.1% 56 29 Current Ratio Quick Ratio Operating Cash Flow / Average Current Liabilities Days Accounts Receivable Days Inventory Days Accounts Payable Net Days Working Capital Long-term Debt Ratio Debt-Equity Ratio Liabilities / Total Assets Operating Cash Flow / Average Total Liabilities Interest Coverage Ratio 17.2% 83 39 54 68 21.0% 34 1.5 1.1 96.6% 58 21 39 40 24.3% 32.0% 50.5% 64.8% 0.3 51 26.6% 44.6% 10.6% -8.2 21.2% 27.0% 45.2% 25.8% 16.8