Vertical Analysis of Income Statement The following comparat

Vertical Analysis of Income Statement

The following comparative income statement (in thousands of dollars) for the two recent fiscal years was adapted from the annual report of Calvin Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways.

a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Round to one decimal place. Enter all amounts as positive numbers.

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a. For each year, show each item as a percentage of total revenues.

b. While overall revenue decreased some between the two years, the overall mix of revenue sources did change somewhat. The NASCAR broadcasting revenue increased as a percent of total revenue by 3 percentage points, while the percent of admissions revenue to total revenue decreased by 2 percentage points. Overall, it appears that income from continuing operations has significantly improved because of aggressive cost cutting .

				Current Year		Previous Year
Revenues:
	Admissions	$92,316			$104,544
	Event-related revenue	135,648			131,648
	NASCAR broadcasting revenue	179,922			170,368
	Other operating revenue	63,114			77,440
		Total revenue	$471,000			$484,000
Expenses and other:
	Direct expense of events	$91,374			$98,252
	NASCAR purse and sanction fees	121,518			120,032
	Other direct expenses	24,492			25,168
	General and administrative	177,567			220,704
		Total expenses and other	$414,951			$464,156
Income from continuing operations	$56,049			$19,844

Solution

Calvin Motorsports, Inc. Comparative Income Statement (in thousands of dollars) For the Years Ended December 31 Current Year Amount Current Year Percent Prior Year Amount Prior Year Percent Revenues: Admissions 92,316 5.05024478 1,04,544 5.455923213 Event-related revenue 1,35,648 7.42076784 1,31,648 6.870421824 NASCAR broadcasting revenue 1,79,922 9.84282401 1,70,368 8.891134125 Other operating revenue 63,114 3.45271837 77,440 4.041424602 Total revenue 4,71,000 25.766555 4,84,000 25.25890376 Expenses and other: 0 0 Direct expense of events 91,374 4.99871167 98,252 5.127557464 NASCAR purse and sanction fees 1,21,518 6.64777119 1,20,032 6.264208133 Other direct expenses 24,492 1.33986086 25,168 1.313462996 General and administrative 1,77,567 9.71399124 2,20,704 11.51806012 Total expenses and other 4,14,951 22.700335 4,64,156 24.22328871 Income from continuing operations 56,049 3.06622005 19,844 1.035615054 1827951 1916156