The current year income statements of two competitors, Green Company and Black Company, are as follows 
Required: 1) What is the gross margin percentage for each company?2) What is the net income percentage for each company?3) Which company is selling their products for lower prices (at a lower markup)?
What will be an ideal response?
1) Gross margin percentage = Gross margin ÷ Net sales:
Green Company = 37.4% ($2,320 ÷ $6,200)
Black Company = 41.0% ($1,410 ÷ $3,440)
2) Net income percentage = Net income ÷ Net sales:
Green Company = 3.6% ($225 ÷ $6,200)
Black Company = 7.1% ($245 ÷ $3,440)
3) Green Company is selling its products at a lower markup: its gross profit percentage is 37.4%, compared to 41.0% for Black Company.
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A) Body B) Title page C) Preliminary sections D) Conclusion E) Cover