FSA $4-2$ Comparative Analysis LO A$1$

Key comparative figures for Apple and Google follow.

$ millions Apple Google

Current Year Prior Year Current Year Prior Year

Net sales $ $265,595$ $ $229,234$ $ $136,819$ $ $110,855$

Cost of sales $ $163,756$ $ $141,048$ $ $59,549$ $ $45,583$

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?

$4-$a$.$ Is the change in the company's current$-$year gross margin favorable or unfavorable for Apple?

$4-$b$.$ Is the change in the company's current$-$year gross margin favorable or unfavorable for Google?