Question

AA 4-2 Comparative Analysis LO A2 Key comparative figures for Apple and Google follow. 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 Apple's current-year gross margin underperform or outperform the industry (assumed) average of 35.0%? 3-b. Does Google's current-year gross margin underperform or outperform the industry (assumed) average of 35.0%? 4-a. Are Apple's current-year gross margin on a favorable or unfavorable trend? 4-b. Are Google's current-year gross margin on a favorable or unfavorable trend? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the amount of gross margin and the gross margin ratio for the two years shown for each of these companies. (Enter your dollar answers in millions. Round your percentage answers to 1 decimal place.) ($ millions) Net sales Cost of sales Gross margin Gross margin ratio Apple Current $ 229,234 $ 141,048 Prior 215,639 131,376 Google Current $ 110,855 $ 45,583 Prior 90,272 35,138

Answer 1

	Apple		Google
	Current	Prior	Current	Prior
Net Sales	229,234	215,639	110,855	90,272
Cost of Sales	141,048	131,376	45,583	35,138
Gross Margin	88,186	84,263	65,272	55,134
Gross Margin Ratio	38.5%	39.1%	58.9%	61.1%
2.Google earns more Margin per dollar of Sales
3-a Outperforms
3-b Outperforms
4-a Unfavorable trend, as % has fallen
4-b Unfavorable trend, as % has fallen