Question: The Quality of Gross Margins: Vitesse Semiconductor Corp. (Easy) Vitesse Semiconductor reported the following revenues and cost of goods sold for 2001- 2003 (in thousands):
Calculate the gross margin ratio (gross margin/sales) for each year. In 2001 the firm took a charge for obsolete inventory of$46.5 million and, in 2002, another $30.5 million. Explain how these charges affect the gross margin ratio in each of the three years.