Chapter 5, Problem 2AA

Key comparative figures for Apple and Google follow.

	Apple		Gwgle
5 millions	Current Year	Prior Year	Current Year	Pnoi Year
N-etsales __________	..... (229,234	$215,639	$110.365	$90,272
Cost of sales________	..... 141.,048	131,376	45,583	35,133

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 year¹
3. Do (a) Apple's and (5) Google's current-year gross margins underperform or outperform the industry (assumed) average of 35.0%'~^> 4. Are (a) Apple's and (b) Google's current-year gross margins on a favorable or unfavorable trend¹