Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
eBook Vertical analysis The following income statement data for AT&T Inc. and Verizon Communications Inc. were taken from their recent annual reports (in millions): AT&T
eBook Vertical analysis The following income statement data for AT&T Inc. and Verizon Communications Inc. were taken from their recent annual reports (in millions): AT&T Verizon Revenues $170,756 $130,863 Cost of services (expense) 79,419 55,508 Selling and marketing expense 36,765 31,083 Depreciation and other expenses 28,476 21,994 Operating income $ 26,096 $ 22,278 Required: a. Prepare a vertical analysis of the income statement for AT&T. Round to one decimal place. AT&T Income Statement Amount Percent 170,756 100 % 79.419 45.7% Revenues Cost'of services (expense) Selling and marketing expense Depreciation and other expenses Operating income 36,765 29.9 % IN, 476 91.1 % 26.096 3,9% b. Prepare a vertical analysis of the income statement for Verizon Round to one decimal place. Verizon Income Statement Amount Percent Revenues Cost of services (expense) 96 pare a vertic analysis of the income statement for Vertron. Round to one decimal place Verizon Income Statement Amount Percent 9 Revenues Cost of services (expense) Selling and marketing expense Depreciation and other expenses Operating income c. Based on Requirements (a) and (b), how does AT&T compare to Verizon? ATAT's operating income is 15.3% of revenues, while Verizon's operating income to revenues 17.0%. Verizon appears to be contin generating operating income from revenues. AT&T cost of services is 46.5% of revenues, while Verizon is over four percentage points less at 42.4% of revenues. This offerences a large contributor to Verizon's superior operating income-to-revenues efficiency. The selling and marketing expenses are 21,5 of revenues for AT&T while verton's are slightly larger at 23.8% of revenues. Depreciation expense is dose for both companies with 16.7% of revenues for ATAT and 15.8 for version summary, it pas that is able to generate more operating income per sales dollar, mostly because of a lower cost of services per dollar in comparison to
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668f884ea6657_574668f884e4b3f8.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668f884f42200_574668f884ed4c62.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started