Analyze Pandora Media Pandora Media, Inc. (P) provides Internet music platform services in North America. Pandora's 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 Subscription Ticketing service $1,072,490 225,786 86,550 $1,384,826 $933,305 220,571 10,167 $1,164,043 Total revenues Expenses: Cost of revenues Sales and marketing General and administrative Product development Total expenses Operating income (loss) Required: $(894,922) $(697,341) (491,455) (398,169) (175,572) (153,943) (141,636) (84,581) $(1,703,585) $(1,334,034) $(318,759) $(169,991) a. Prepare a vertical analysis of the two income statements. Round percentages to one decimal place. 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 % Subscription $1,072,490 225,786 86,550 $933,305 220,571 10,167 $1,164,043 Ticketing service Total revenues $1,384,826 % Expenses: Cost of revenues % Sales and marketing General and administrative $(894,922) (491,455) (175,572) (141,636) $(1,703,585) $(318,759) $(697,341) (398,169) (153,943) (84,581) $(1,334,034) $(169,991) Product development Total expenses % % % Operating income (loss) 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. ent of revenues. Overall, is a percent