Vertical Analysis of Income Statement

The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Calvin Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways.

				Current Year			Previous Year
Revenues:
	Admissions			$101,156			$114,042
	Event-related revenue			136,972			144,918
	NASCAR broadcasting revenue			181,984			172,308
	Other operating revenue			63,888			66,732
		Total revenue		$484,000			$498,000
Expenses and other:
	Direct expense of events			$101,640			$100,596
	NASCAR event management fees			116,644			126,990
	Other direct operating expenses			18,876			26,394
	General and administrative			194,084			210,654
		Total expenses and other		$431,244			$464,634
Income from continuing operations				$52,756			$33,366

Question Content Area

a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Round to one decimal place. Enter all amounts as positive numbers.

Calvin Motorsports, Inc. Comparative Income Statement (in thousands of dollars) For the Years Ended December 31

	Current Year Amount	Current Year Percent	Prior Year Amount	Prior Year Percent
Revenues:
Admissions	$101,156	fill in the blank e0c758fddff8f85_1%	$114,042	fill in the blank e0c758fddff8f85_2%
Event-related revenue	136,972	fill in the blank e0c758fddff8f85_3%	144,918	fill in the blank e0c758fddff8f85_4%
NASCAR broadcasting revenue	181,984	fill in the blank e0c758fddff8f85_5%	172,308	fill in the blank e0c758fddff8f85_6%
Other operating revenue	63,888	fill in the blank e0c758fddff8f85_7%	66,732	fill in the blank e0c758fddff8f85_8%
Total revenue	$484,000	fill in the blank e0c758fddff8f85_9%	$498,000	fill in the blank e0c758fddff8f85_10%
Expenses and other:
Direct expense of events	$101,640	fill in the blank e0c758fddff8f85_11%	$100,596	fill in the blank e0c758fddff8f85_12%
NASCAR event management fees	116,644	fill in the blank e0c758fddff8f85_13%	126,990	fill in the blank e0c758fddff8f85_14%
Other direct operating expenses	18,876	fill in the blank e0c758fddff8f85_15%	26,394	fill in the blank e0c758fddff8f85_16%
General and administrative	194,084	fill in the blank e0c758fddff8f85_17%	210,654	fill in the blank e0c758fddff8f85_18%
Total expenses and other	$431,244	fill in the blank e0c758fddff8f85_19%	$464,634	fill in the blank e0c758fddff8f85_20%
Income from continuing operations	$52,756	fill in the blank e0c758fddff8f85_21%	$33,366	fill in the blank e0c758fddff8f85_22%

Question Content Area

b. While overall revenue

increaseddecreased

some between the two years, the overall mix of revenue sources did change somewhat. The NASCAR broadcasting revenue

increaseddecreased

as a percent of total revenue by 3 percentage points, while the percent of admissions revenue to total revenue

increaseddecreased

by 2 percentage points. Overall, it appears that income from continuing operations has significantly improved because of

aggressive cost cuttinga large increase in total revenue

.