P6-74B. (Learning Objective 4: Using gross profit percentage and inventory turnover to evaluate two companies) Pastry People and Coffee Grind 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 Pastry People and Coffee Grind for 20X6.
2. Based on these statistics, which company looks more profitable? Why? What other expense category should we consider in evaluating these two companies?

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A1 2 (Adapted, in millions of $) 123456789 3 Revenues: Net sales 6 Costs and Expenses: Cost of goods sold Pastry People, Inc. Income Statement Selling, general, and administrative expenses 12 Months Ended Dec. 31 20X6 20X5 $ 558 $ 711 486 595 62 56