Key comparative figures ($ millions) for both Best Buy and Circuit City follow.

Required 1. Compute the dollar amount of gross margin and the gross margin ratio for the two years shown for both companies.
2. Which company earns more in gross margin for each dollar of net sales? How does each company compare to the industry average of 29%?
3. Did the gross margin ratio improve or decline for these companies?

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Best Buy Circuit City Key Figures Current Year Prior Year Current Year Prior Year Revenues (net sales) $27,433 $24.548 $10,472 Cost of sales 20,938 18,677 7.904 $9.857 7,573