The image provides financial data for Apple and Google over two years, focusing on net sales and the cost of sales. It includes instructions for calculating various financial metrics.### Table: Financial Overview#### Apple- **Current Year** - **Net Sales:** $265,595 million - **Cost of Sales:** $163,756 million- **Prior Year** - **Net Sales:** $229,234 million - **Cost of Sales:** $141,048 million#### Google- **Current Year** - **Net Sales:** $136,819 million - **Cost of Sales:** $59,549 million- **Prior Year** - **Net Sales:** $110,855 million - **Cost of Sales:** $45,583 million### Required:1. Calculate Gross Margin and Gross Margin Ratio for each company and year.2. Determine which company has a higher gross margin per dollar of net sales for the current year.3. Compare the current-year gross margin with the industry average of 35% for Apple and Google.4. Assess whether the change in gross margin from the prior year is favorable for Apple and Google.Users are prompted to enter calculations in specific sections labeled Required 1, Required 2, Required 3, and Required 4, with a note to report dollar amounts in millions and percentages to one decimal place.

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$ millions Net sales Cost of sales. Apple Current Year $ 265,595 $ 163,756 Prior Year $ 229,234 $ 141,048 Google Current Year $ 136,819 $ 59,549 Prior Year $ 110,855 $ 45,583 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-a. Does the company's current-year gross margin underperform or outperform the 35% industry average in the case of Apple? 3-b. Does the company's current-year gross margin underperform or outperform the 35% industry average in the case of Google?

$ millions Net sales Cost of sales. Apple Current Year $ 265,595 $ 163,756 Prior Year $ 229,234 $ 141,048 Google Current Year $ 136,819 $ 59,549 Prior Year $ 110,855 $ 45,583 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-a. Does the company's current-year gross margin underperform or outperform the 35% industry average in the case of Apple? 3-b. Does the company's current-year gross margin underperform or outperform the 35% industry average in the case of Google?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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