Companies often budget selling expenses and general and administrative expenses (SGA) as a percentage of expected sales.

Required:

1. For both Apple and Google, list the prior three years’ sales (in dollars) and total selling expenses and general and administrative expenses (in dollars). Use the financial statements in Appendix A.

2. Compute the ratio of total selling expenses and general and administrative expenses to sales for each of the three years.

3. Using the data from part 2, predict both companies’ total selling expenses and general and administrative expenses (in dollars) for the next two years. (If possible, compare your predictions to actual amounts for those years.)

Data From Apple and google for financial Statement Appendix A 

Apple Statement 

Transcribed Image Text:

Google Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions) Year Ended December 31 Revenues Costs and expenses Cost of revenues Research and development Sales and marketing General and administrative Total costs and expenses Income from operations Other income (expense), net Income from continuing operations before income taxes Provision for income taxes Net income from continuing operations Net income (loss) from discontinued operations Net income Less: Adjustment Payment to Class C capital stockholders Net income available to all stockholders 2013 2014 2015 55,519 66,001 74,989 21,993 25,691 28,164 7,137 9,832 12,282 6,554 8,131 9,047 4,432 5,851 6,136 40,116 49,505 55,629 15,403 16,496 19,360 496 763 291 15,899 17,259 19,651 2.739 3,639 3,303 $ 13,160 $ 13,620 $ 16,348 (427) 516 0 12,733 14,136 $ 16,348 522 12,733 $ 14,136 $ 15,826 See accompanying notes.