Examining Gateway’s Segment Data The notes to Gateway’s 1998 financial statements contain disclosures of sales and operating income reported by customer type and geographic region. Using the information provided in the notes to the financial statements, answer the following:

a. Were Gateway’s 1998 sales to consumers or businesses greater? Was gross profit greater from its sales to consumers or businesses?

b. On the basis of the ratio of operating income to net sales, should Gateway place future emphasis on consumer or business sales? What other factors might Gateway wish to take into consideration before establishing its sales goals for the coming year?

c. What expenses does Gateway deduct in computing operating income for these segments? What costs are excluded in computing operating income for the segments?

d. What segments were used in Gateway’s analysis by geographic region?

e. Which of these regions was the most profitable in 1998?

f. If Gateway wished to focus more heavily on sales outside the United States, on which geographic region should it place greatest effort? Explain.