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

Requirements

1. Compute the gross margin percentage and the rate of inventory turnover for Sprinkle Top and Coffee Shop for 2018.

2. Based on these statistics, which company looks more profitable? Why?

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A1 Sprinkle Top, Inc. Income Štatements (Adapted) Years Ended December 31 2 (Amounts in millions) 3 Revenues: Net sales 2018 2017 450 $ 701 4 6 Costs and Expenses: Cost of goods sold Selling, general, and administrative expenses 598 360 64 50 9. A1 Sprinkle Top, Inc. Balance Sheets (Adapted) December 31 2 (Amounts in millions) 2018 2017 3 Assets 4 Current assets: Cash and temporary investments 15 $ 28 32 31 30 Receivables Inventories 10