1. Analyze Pandora Media

   Pandora Media, Inc. (P) provides Internet music platform services in North America. Pandoras income statements through operating 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:
   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)
   Operating income (loss)		$(318,759)		$(169,991)

   Required:

   a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place.

   Pandora Media, Inc.
   Income Statements
   For the Years Ended January 31
   (in thousands)
   		Year 2				Year 1
   		Amount		Percent		Amount		Percent
   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:
   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)		%
   Operating income (loss)		$(318,759)		%		$(169,991)