The financial statements of Green Mountain Coffee are presented in Appendix B, following the financial statements for Starbucks in Appendix A.

\section*{Instructions}

(a) Based on the information contained in these financial statements, determine the following values for each company:

(1) Profit margin ratio for 1996

(2) Gross profit for 1996

(3) Gross profit rate for 1996

(4) Operating income for 1996

(5) Percentage change in operating income from 1995 to 1996

(6) Operating expenses to sales ratio for 1996

(b) What conclusions concerning the relative profitability of the two companies can be drawn from these data?