Exercise 1 Company ABC Income Statement (in thousands) Revenue $150 Cost of goods sold $23 (6 marks) Company XYZ Income Statement (in thousands) Revenue $250 Cost of goods sold $25 $80 Gross profit Operating expenses $180 $40 $25 Operating profit $70 $5 Gross profit Operating expenses Operating profit Interest expense Earnings before taxes Tax expense Net income $150 $15 Interest expense Earnings before taxes Tax expense Net income $50 $20 $30 $150 $50 $80 Calculate the Gross Profit Margin of both companies and comment on which one is in a better position. Please type your answer below. Exercise 2 (4 marks) If the Gross profit Margin of a company was reported 25% at the end of the previous year, and has been reported 23.6% at the end of next year, what changes have occurred in the GPM of the company and what are the possible reasons for this change? Please type your answer below