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Question: sun microsystems is a leading supplier of computerrelated products including...

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Sun Microsystems is a leading supplier of computer-related products, including servers, workstations, storage devices, and network switches. In 2009, Sun Microsystems was acquired by Oracle Corporation. In the letter to stockholders as part of the 2001 annual report, President and CEO Scott G. McNealy offered the following remarks: Fiscal 2001 was clearly a mixed bag for Sun, the industry, and the economy as a whole. Still, we finished with revenue growth of 16 percent—and that's significant. We believe it's a good indication that Sun continued to pull away from the pack and gain market share. For that, we owe a debt of gratitude to our employees worldwide, who aggressively brought costs down—even as they continued to bring exciting new products to market.

The statement would not appear to be telling you enough. For example, McNealy says the year was a mixed bag with revenue growth of 16 percent. But what about earnings? You can delve further by examining the income statement in Exhibit 4. Also, for additional analysis of other factors, consolidated balance sheet(s) are presented in Exhibit 5.

Exhibit1 1998 Dollars Dollars $15,726$ 11,816 $ 9,861 2001 Dollars 2000 Dollars 1999 Net revenues Costs and expenses $ 18,350 Cost of sales 10,045 $7,550$5,671 $4,511 28 1,262 Research and development 2,016 4,542 261 79 1,6 1,024 3,1942,812 0.2 174 4,068 Selling, general and administrative Goodwill amortization 63 17 13 122 In-process research and development Total costs and expenses $ 16,943 $ 13,322S 10,266 $ 8,521.2 Operating Income Gain (loss) on strategic nvestments Interest income net $1,407 S-92 $2,404$1,550$ 1,339.8 S 201 S362 S 174 $ 88 $49 Litigation settlement Income before taxes $1,677 773.08 S -52 $2,779$1,638$ 1,388.8 $952.18$591.6 $ 626.32 Provision for ncome taxes Cumulative effect of change in accounting principle, net Net income $ 955.92 $0.28 $ 1.826.821 $ 1.0464| $ 76248 0.540.320.24 Net income per common share- diluted Shares used in the calculation of net ncome per common share- diluted 3,414 3,3833,270 3,177

Exhibit2 Assets Current assets 2001 2000 Cash and cash equivalent Short-term investments Accounts receivable, net allowances of $1,473 386 2,959 $1,858 629 2,694 $410 in 2001 and $534 in 2000 550 671 478 6,880 2,090 4,482 164 Inventories Deferred tax assets Prepaids and other current assets 1,049 1.018 970 7,855 2,692 4,670 2,039 Total current assets Property, plant and equipment, net Long-term investments Goodwill, net of accumulated amortization of $349 in 2001 and $88 in 2000 Other assets, net 834 521 18,090 14,137 Liabilities and Stockholders Equity Current liabilities Short-term borrowings Accounts payable Accrued payroll-related liabilities Accrued liabilities and other Deferred revenues and customer deposits Warranty reserve Income taxes payable 1,053 486 1,379 1,824 927 754 1,154 1,288 209 4,554 572 Total current liabilities Deferred income taxes Long-term debt and other obligations Total debt Commitments and contingencies Stockholders equity 5.143 741 1,703 7,587 6.842 Preferred stock, $0.001 par value, 10 shares authorized (1 sahre which has been designated as Series A Preferred participating stock): no shares issued and outstanding Common stock and additional paid-in-capital $0.00067 par value, 7,200 shares authorized issued: 3,536 shares in 2001 and 301 shares n 2000 2,723 1,437 Treasury stock, at cost: 288 shares in 2001 and 301 shares in 2000 -2,440 Deferred equity compensation Retained earnings Accumulated other comprehensive income 6,805 5,954 72 (loss) Total stockholders equity 10,503 18,090 7,295 14,137

Compute return on stockholders equity for 2000 and 2001 using data from Exhibits 1 and 2. 2000 Return on Stockholders Equity: 2001 Return on Stockholders Equity:

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