Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 66

Manufacturers such as Apple and Google usually work to maintain a high-quality and lowcost operation. One ratio routinely computed for this assessment is the cost of goods sold divided by total expenses. A decline in this ratio can mean that the company is spending too much on selling and administrative activities. An increase in this ratio beyond a reasonable level can mean that the company is not spending enough on selling activities. (Assume for this analysis that total expenses equal the cost of goods sold plus total operating expenses.)
Required
1. For Apple and Google refer to Appendix A and compute the ratios of cost of goods sold to total expenses for their two most recent fiscal years. (Record answers as percents, rounded to one decimal.)
2. Comment on the similarities or differences in the ratio results across both years between the companies.
Reference: Apple 's financial statements and notes in Appendix A




Reference: Google financial statements and notes in Appendix A