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 Speedway 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			$116,034			$130,239
	Event-related revenue			151,562			163,621
	NASCAR broadcasting revenue			192,662			185,394
	Other operating revenue			29,902			26,951
		Total revenues		$490,160			$506,205
Expenses and other:
	Direct expense of events			$101,402			$106,204
	NASCAR purse and sanction fees			122,950			120,146
	Other direct expenses			18,908			20,352
	General and administrative			183,215			241,223
		Total expenses and other		$426,475			$487,925
Income from continuing operations				$63,685			$18,280

Question Content Area

a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. (Note: Due to rounding, amounts may not total 100%).

Round your percentages to one decimal place.

Speedway 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	$116,034	fill in the blank af6c2705303bff6_1%	$130,239	fill in the blank af6c2705303bff6_2%
Event-related revenue	151,562	fill in the blank af6c2705303bff6_3%	163,621	fill in the blank af6c2705303bff6_4%
NASCAR broadcasting revenue	192,662	fill in the blank af6c2705303bff6_5%	185,394	fill in the blank af6c2705303bff6_6%
Other operating revenue	29,902	fill in the blank af6c2705303bff6_7%	26,951	fill in the blank af6c2705303bff6_8%
Total revenues	$490,160	fill in the blank af6c2705303bff6_9%	$506,205	fill in the blank af6c2705303bff6_10%
Expenses and other:
Direct expense of events	$101,402	fill in the blank af6c2705303bff6_11%	$106,204	fill in the blank af6c2705303bff6_12%
NASCAR purse and sanction fees	122,950	fill in the blank af6c2705303bff6_13%	120,146	fill in the blank af6c2705303bff6_14%
Other direct expenses	18,908	fill in the blank af6c2705303bff6_15%	20,352	fill in the blank af6c2705303bff6_16%
General and administrative	183,215	fill in the blank af6c2705303bff6_17%	241,223	fill in the blank af6c2705303bff6_18%
Total expenses and other	$426,475	fill in the blank af6c2705303bff6_19%	$487,925	fill in the blank af6c2705303bff6_20%
Income from continuing operations	$63,685	fill in the blank af6c2705303bff6_21%	$18,280	fill in the blank af6c2705303bff6_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 almost 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

.