Vertical Analysis of Income Statement The following comparative income statement
ID: 2570531 • Letter: V
Question
Vertical Analysis of Income Statement
The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway 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. Enter all amounts as positive numbers. (Note: Due to rounding, amounts may not total 100%).
Round your percentages to one decimal place.
b. Overall revenue (Increased/Decreased) some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue (I/D) by 1.0% of total revenue, while event-related revenue (I/D) by 0.7% of total revenue. NASCAR event management fees, (I/D) by 0.4%of total revenue. General and administrative expenses, however, (I/D) by over 4% of total revenue. It appears that (aggressive cost cuttting/ a large increase in total revenue) has helped the company significantly improve its income from continuing operations.
Current Year Previous Year Revenues: Admissions $100,694 $100,798 Event-related revenue 146,980 146,849 NASCAR broadcasting revenue 217,469 207,369 Other operating revenue 31,320 29,293 Total revenues $496,463 $484,309 Expenses and other: Direct expense of events $104,303 $102,196 NASCAR event management fees 133,682 128,254 Other direct expenses 19,541 18,513 General and administrative 177,926 194,120 Total expenses and other $435,452 $443,083 Income from continuing operations $61,011 $41,226Explanation / Answer
Speedway 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
$1,00,694
20.3%
$1,00,798
20.8%
Event-related revenue
$1,46,980
29.6%
$1,46,849
30.3%
NASCAR broadcasting revenue
$2,17,469
43.8%
$2,07,369
42.8%
Other operating revenue
$31,320
6.3%
$29,293
6.1%
Total revenues
$4,96,463
100.00%
$4,84,309
100.00%
Expenses and other:
Direct expense of events
$1,04,303
21.0%
$1,02,196
21.1%
NASCAR event management fees
$1,33,682
26.9%
$1,28,254
26.5%
Other direct expenses
$19,541
3.9%
$18,513
3.8%
General and administrative
$1,77,926
35.8%
$1,94,120
40.1%
Total expenses and other
$4,35,452
87.7%
$4,43,083
91.5%
Income from continuing operations
$61,011
12.3%
$41,226
8.5%
b. Overall revenue Increased some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue Increase by 1.0% of total revenue, while event-related revenue Decrease by 0.7% of total revenue. NASCAR event management fees, Increase by 0.4%of total revenue. General and administrative expenses, however, Decrease by over 4% of total revenue. It appears that a large increase in total revenue has helped the company significantly improve its income from continuing operations.
Speedway 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
$1,00,694
20.3%
$1,00,798
20.8%
Event-related revenue
$1,46,980
29.6%
$1,46,849
30.3%
NASCAR broadcasting revenue
$2,17,469
43.8%
$2,07,369
42.8%
Other operating revenue
$31,320
6.3%
$29,293
6.1%
Total revenues
$4,96,463
100.00%
$4,84,309
100.00%
Expenses and other:
Direct expense of events
$1,04,303
21.0%
$1,02,196
21.1%
NASCAR event management fees
$1,33,682
26.9%
$1,28,254
26.5%
Other direct expenses
$19,541
3.9%
$18,513
3.8%
General and administrative
$1,77,926
35.8%
$1,94,120
40.1%
Total expenses and other
$4,35,452
87.7%
$4,43,083
91.5%
Income from continuing operations
$61,011
12.3%
$41,226
8.5%
b. Overall revenue Increased some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue Increase by 1.0% of total revenue, while event-related revenue Decrease by 0.7% of total revenue. NASCAR event management fees, Increase by 0.4%of total revenue. General and administrative expenses, however, Decrease by over 4% of total revenue. It appears that a large increase in total revenue has helped the company significantly improve its income from continuing operations.
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