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Analyze Pandora Media Pandora Media, Inc. (P) provides internet music platform services in income for two recent years are as follows (in thousands): Pandora Media,

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Analyze Pandora Media Pandora Media, Inc. (P) provides internet music platform services in income for two recent years are as follows (in thousands): Pandora Media, Inc. Income Statements For the Years Ended January 31 (in thousands) Year 2 Year 1 Revenues: Advertising $1,072,490 $933,305 Subscription 225,786 220,571 Ticketing service 86,550 10,167 Total revenues $1,384,826 $1,164,043 Expenses: h Cost of revenues Chapter 3 Exercises & Problems assignment take Sales and marketing (491,455) (398,169) General and administrative (175,572) (153,943) Product development (141,636) (84,581) Total expenses $(1,703,585) $(1,334,034) Operating income (loss) $(318,759) $(169,991) Required: a. Prepare a vertical analysis of the two income statements. Round perce O JA Income Statements For the Years Ended January 31 in thousands) Year 2 Year 1 Amount Percent Amount Percent Revenues: Advertising $1,072,490 77.4 % $933,305 % Subscription 225,786 % 220,571 % Ticketing service 86,550 % 10,167 % Total revenues $1,384,826 % $1,164,043 % Expenses: Cost of revenues $(894,922) % $(697,341) % Sales and marketing (491,455) % (398,169) % General and administrative (175,572) % (153,943) % Product development (141,636) % (84,581) % Total expenses $(1,703,585) % $(1,334,034) % $(318,759) % Operating income (loss) $(169,991) % b. Interpret the vertical analysis. Although revenues have in Year 2, expenses also . The result is that the operating loss Except for general and administrative expenses, all expenses as a percent of revenues in Year 2. In addition, the mix of revenues has changed in Year 2. Ticketing service revenue in Year 2, while advertising and subscription revenues as a percent of revenues. Overall, Pandora appears to be changing its operating strategy and mix of products to ultimately become profitable

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