The ratio of costs to revenues can indicate opportunities for activity based costing to increase efficiency and reduce costs. Refer to Apple's and Google's 2017 income statements in Appendix A to answer the following Required: 1. For Apple, compute the ratio of costs (titled as cost of sales plus operating expenses) to net sales for 2017 2. For Google, compute the ratio of costs (titled as total costs and expenses) to revenues for 2017 3. Which company has the higher ratio of costs to revenues for 2017? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For Apple, compute the ratio of costs (titled as cost of sales plus operating expenses) to net sales for 2017. (Round your answer to three decimal places.) Apple 73 240 Ratio of costs to revenues The ratio of costs to revenues can indicate opportunities for activity based costing to increase efficiency and reduce costs. Refer to Apple's and Google's 2017 income statements in Appendix A to answer the following Required: 1. For Apple, compute the ratio of costs (utled as cost of sales plus operating expenses) to net sales for 2017 2. For Google, compute the ratio of costs (titled as total costs and expenses) to revenues for 2017 3. Which company has the higher ratio of costs to revenues for 2017 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For Google, compute the ratio of costs (titled as total costs and expenses) to revenues for 2017. (Round your answer to three decimal places.) Ratio of costs to revenues Google 58 881 September 26, 2015 $ 233,715 140,089 93.626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales $ 229,234 5 215.639 Cost of sales 141.048 131 376 Gross margin 88,186 84.263 Operating expenses Research and development 11,581 10.045 Selling, general and administrative 15,261 14,194 Total operating expenses 26,842 24.219 Operating income 61,344 60.024 Other income (expense), net 2,745 1348 Income before provision for income taxes 64,089 61,372 Provision for income taxes 15.738 15.685 Net income 48,351 45,687 8,067 14.329 22.396 71.230 1.285 72 SIS 19.121 53.394 9.28 5 5 9.22 Earnings per share Basic 9.27 S 835 Diluted S 9.21 $ 831 Shares used in computing earnings per share: Basic 5.217.242 5,470.820 Diluted 5,251,692 5.500.281 Cash dividends declared per share 2.40 s 2.18 See accompanying Notes to Consolidated Financial Statements 5,753,421 5,793,069 1.98 $ Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 September 26, 2015 Net income 4351 5 45.687 $ 53.394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77). $8 and $201. respectively 224 75 (411 Change in unrealized gain losses on derivative instruments Change in fair value of derivatives, net of tax benefit (expense of $(478), 5(7) and S(441), respectively 1.315 7 2.905 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit of $475,5131 and 5630, respectively 1.477) (741) 3,497) Total change in unrealized gains/losses on derivative instruments, net of tax (162) 734) (592 Change in unrealized ains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $425, 5(863) and 5264, respectively (782) 1.582 Adjustment for net(gains) losses realized and included in net income net of tax expense benefit of 535, 5631), and 32. respectively (64) Total change in unrealized gains/losses on marketable securities, nel of tax (846) Total other comprehensive income (los) 784 1.427 Total comprehensive income 47.567 46.666 5 51.967 979 2016 90.272 2017 110,855 S S Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF INCOME (In millions) Year Ended December 31 2015 Revenues 74,989 Costs and expenses Cost of revenues 28,164 Research and development 12.282 Sales and marketing 9.047 General and administrative 6,136 European Commission fine 0 Total costs and expenses 55,629 Income from operations 19.360 Other income (expense), net 291 Income before income taxes 19.651 Provision for income taxes 3.303 Net income 16,348 Less: Adjustment Payment to Class C capital stockholders 522 Net income available to all stockholders 15,826 35,138 13.948 10,485 6,985 0 66,556 23,716 434 24.150 4,672 19.478 45,583 16,625 12,893 6,872 2,736 84,709 26,146 1.047 27,19 14.531 12,662 0 12,662 5 s 0 s 19,478 "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's $110.855 billion in revenues. See accompanying notes 2016 19,478 2017 12,662 $ (599) 1.543 Google Inc. (Alphabet Inc.) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31 2015 Net income 5 16,348 S Other comprehensive income (loss): Change in foreign currency translation adjustment (1,067) Available for sale investments Change in net unrealized gains (losses) (15) Lew: reclassification adjustment for net (gains) losses included in net income 208 Net change (net of tax effect of $29, 50, and so) (507) Cash flow hodges Change in net unrealized gains (losses) 676 Less: reclassification adjustment for net(gains) losses included in net income (1.003) Net change (net of tax effect of $115.564, and $247) (327) Other comprehensive income (loss) (1.901) Comprehensive income 14,447 $ 307 (314) 221 (93) 105 412 515 (351) 161 (528) 18.950 (638) 93 (545) 1.410 14.072 s "Google is part of Alphabet, but we loosely refer to Alphabet as "Google" because of its global familiarity and that Google provides 99% of Alphabet's 5110,855 billion in revenues See accompanying notes