Key comparative figures for Apple and Google follow.

Required

1. Compute the amount of gross margin and the gross margin ratio for the two years shown for each of these companies.
2. Which company earns more in gross margin for each dollar of net sales for the current year?
3. Does the company’s current-year gross margin underperform or outperform the 35% industry average in the case of 

(a) Apple 

(b) Google?

4. Is the change in the company’s current-year gross margin favorable or unfavorable for 

(a) Apple 

(b) Google?

Transcribed Image Text:

Apple Google S millions Current Year Prior Year Current Year Prior Year Net sales...... $260,174 $265,595 $161,857 $136,819 Cost of sales... 161,782 163,756 71,896 59,549