1.

Google Inc.
Consolidated Statements of Income
(in millions, except per share amounts)
Revenues					2012	2013
	Google (advertising and other)				$ 46,039	$ 55,519
	Motorola Mobile (hardware and other)				$ 4,136	$ 4,306
Total revenues					$ 50,175	$ 59,825
Cost of revenues
	Cost of revenues - Google (advertising and other)*				$ 17,176	$ 21,993
	Cost of revenues - Motorola Mobile (hardware and other)*				$ 3,458	$ 3,865
Total cost of revenues					$ 20,634	$ 25,858
Gross Profit					$ 29,541	$ 33,967
Operating expenses
	Research and development				$ 6,793	$ 7,952
	Sales and marketing				$ 6,143	$ 7,253
	General and administrative				$ 3,845	$ 4,796
Total opearating expenses					$ 16,781	$ 20,001
Income from operations					$ 12,760	$ 13,966
Interests and other income, net					$ 626	$ 530
Income from continuing operations before income taxes					$ 13,386	$ 14,496
Income taxes					$ 2,598	$ 2,282
Net income					$ 10,788	$ 12,214
*Includes stock-based compensation expenses

Requirements:
1. Calculate the $ change and % change from 2012 to 2013. (15 points)
2. Calculate the common size % for each year using total revenues as your base amount (15 points)
3. In what year, was the company able to retain a higher % of gross profit? Why do you think that was the case? (10 points)
4. In what year, was the company able to retain a higher % of net income? Why do you think that is the case? (10 points)

Apple Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares which are reflected in thousands and per share amount)
	September 29, 2012	September 28, 2013
Net sales	$ 156,508	$ 170,910
Cost of sales	87,846	106,606
Gross margin	68,662	64,304
Operating expenses:
Research and development	3,381	4,475
Selling, general and
administrative	10,040	10,830
Total operating expenses	13,421	15,305
Operating income	55,241	48,999
Other income/(expense), net	522	1,156
Income before provision for
income taxes	55,763	50,155
Provision for income taxes	14,030	13,118
Net income	$ 41,733	$ 37,037

Requirements:
1. Calculate the $ change and % change from 2012 to 2013 (15 Points)
2. Calculate the common size % for each year using total revenues as your base amount (15 Points)
3. In what year, was the company able to retain a higher % of gross profit? Why do you think that was the case? (10 Points)
4. In what year, was the company able to retain a higher % of net income? Why do you think that was the case? (10 Points)

3. Google vs. Apple Competitor Analysis (25 Points)

Requirements:

1. Which company retained a higher % of gross profit in 2013 and why do you think the company was successful in doing that?

2. Which company retained a higher % of net income in 2013 and why do you think the company was successful in doing that?

3. If you had $1 million to invest, which companys stock would you buy and why?