Magic Muffins, Inc., and Top Roast Coffee Corporation are both specialty food chains. The two companies reported these figures, in millions:

Requirements
1. Compute the gross profit percentage and the rate of inventory turnover for Magic Muffins and Top Roast Coffee for 2014.
2. Based on these statistics, which company looks more profitable? Why? What other expense category should we consider in evaluating these twocompanies?

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A1 Magic Muffins, Inc. Income Statements (Adapted) Years Ended December 31 2 (Amounts in millions) 2014 2013 Revenues Net sales 540 $ 705 Costs and Expenses: Cost of goods sold Selling, general, and administrative expenses 470 595 A1 Magic Muffins, Inc. Balance Sheets (Adapted) December 31 2 (Amounts in millions) 2014 2013 Assets Current assets: Cash and temporary investments Receivables Inventories S 21 24 25 40 1830 A1 Top Roast Coffee Corporation Income Statements (Adapted) Years Ended December 31 2 (Amounts in millions) 2014 2013 Net sales 7,710 3,170 2975 2,360 4 Cost of goods sold 600 Selling, genera, and administrative expenses A1 Top Roast Coffee Corporation Balance Sheets (Adapted) December 31 2 (Amounts in millions) 2014 2013 Assets Current assets: 5 Cash and temporary investments $320175 195 Receivables, net 220 7Inventories