Amazon.com, Inc.'s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. (Use Wal-Mart's January 31, 2016, financial statements for comparative purposes.) The complete annual reports of Amazon and Wal-Mart, including the notes to the financial statements, are available at each company’s respective website.

Instructions

a. Based on the information contained in these financial statements, determine each of the following for each company. Use Amazon's net product sales to compute gross profit information.

1.Gross profit for 2015.

2. Gross profit rate for 2015.

3. Operating income for 2015.

4. Percentage change in operating income from 2014 to 2015.

b. What conclusions concerning the relative profitability of the two companies can you draw from these data?