The following information was summarized from the 2006, Ask an Expert

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The following information was summarized from the 2006 Annual Report of Apple Computer,

(in millions)
Cost of sales for the year ended:
September 30, 2006 $13,717
September 24, 2005 (as restated) 9,889
Inventories:
September 30, 2006 270
September 24, 2005 (as restated) 165
Net sales for the year ended:
September 30, 2006 19,315
September 24, 2005 (as restated) 13,931

The following information was summarized from the 2006 Annual Report of Hewlett-Packard Company,

(in millions)
Cost of sales* for the year ended:
October 31, 2006 $55,248
October 31, 2005 52,550
Inventory:
October 31, 2006 7,750
October 31, 2005 6,877
Net revenue for the year ended:
October 31, 2006 91,658
October 31, 2005 88,696
* Denotes as "cost of products" by Hewlett-Packard.

Requred:
1. Calculate the gross profit ratios for Apple Computer and Hewlett-Packard for each of the two years presented.

2. Calculate the inventory turnover ratios for both companies for the most recent year.

3. Which company appears to be performing better? What other information should you consider to determine how these companies are performing in this regard?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9987059

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