The following data were taken from Microsoft Corporation’s 2004 annual report. All dollar amounts are in millions.

Required:

a. Compute Microsoft’s gross margin percentage for 2004 and 2003.

b. Compute Microsoft ’s return on sales percentage for 2004 and 2003.

c. Based on the percentages computed in Requirements a and b did Microsoft’s performance get better or worse from 2003 to 2004?

d. Compare Microsoft’s gross margin percentages and return on sales percentages to those of the other real-world companies discussed in this chapter and discuss whether or not it appears to have better-than-average financial performance or not.

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Revenue Cost of Goods Sold Net Income Fiscal Years Ending June 30, 2004 June 30, 2003 $36,835 $32,187 6,716 6,059 8,168 7,531