Review the annual report of MCI and answer the following questions.

a. Compute current assets, total communications systems (net), current liabilities, long-term debt, and stockholders’ equity as a percentage of total assets for 1994 and 1993, and com¬ ment on how these proportions have changed.

b. Compute operating expenses, interest expense, taxes on income, and net income as a per¬ centage of revenues for 1994, 1993, and 1992, and comment on how these proportions have changed.

c. Compute the current ratio, working capital, the debt (total liabilities)/equity ratio, earnings per share, return on equity, and the price/eamings ratio, and comment on the company’s solvency and earning power position.

d. Over the past three years, from what sources has the company generated most of its cash, and in what ways has the cash been used?