The Gannett Co., Inc.,∗ presented this selected financial data with its 2006 annual report.

Required

a. 1. For net operating revenues, prepare a horizontal common-size analysis for 2002–2006. Use 2002 as the base.
2. Comment on the results in (1).

b. 1. For net operating revenues, prepare a vertical common-size analysis for 2002–2006. Use total net operating revenues as the base.
2. Comment on the results in (1).

c. 1. For operating expenses, prepare a horizontal common-size analysis for 2002–2006. Use 2002 as the base.
2. Comment on the results in (1).

d. 1. For operating expenses, prepare a vertical common-size analysis for 2002–2006. Use total operating expenses as the base.
2. Comment on the results in (1).

e. Based on these data, compute the following for 2004–2006:
1. Degree of financial leverage Earnings Before Interest and Tax / Earnings Before Tax 2. Price/earnings ratio 3. Dividend yield

f. Comment on the ratios in (e).

In thousands of dollars, except per share amounts SELECTED FINANCIAL DATA (in Part) Net operating revenues Newspaper advertising Newspaper circulation 2006 2005 2004 2003 $ 5,370,453 1,306,549 $ 5,161,208 1,264,031 $ 4,835,335 1,218,486 $ 4,322,951 1,192,873 *"Gannett Co., Inc. is a leading international news and information company." 10-K 2002 $ 4,051,361 1,161,778