From the following consolidated statements of earnings for Netflix, Inc., prepare a vertic analysis in the form of a common-size income statement (percentages only) for 2013.
NETFLIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands)
Twelve Months Ended December 31,2013 | |
Revenues | $4,374,562 |
Cost of revenues | 3,083,256 |
Marketing | 503,889 |
Technology and development | 378,769 |
General and administrative | 180,301 |
Operating income | 228,347 |
Other income (expense) | |
Interest expense | (29,142) |
Interest and other | (3,002) |
Loss on extinguishment of debt | (25,129) |
Income before income taxes | 171,074 |
Provision for income taxes | 58,671 |
Net income | $ 112,403 |
To calculate: The vertical analysis of an provided income statement for Netflix, Inc. for the year December
Given Information:
The consolidated statement of operation of Netflix, Inc.
Netflix, Inc. Consolidated statements of operations (in thousands) ($) | |
Revenue | |
Cost of revenues | |
Technology and development | |
General administrative | |
Operating income | |
Other income(expense) | |
Interest expense | |
Interest and other | |
Loss on extinguishment of debt | |
Income before income taxes | |
Provision for income taxes | |
Net income |
Formula used:
Follow the steps to prepare a vertical analysis of an income statement:
Step
Step
Step
Calculation:
Take revenues as the base parameter to calculate the percentages. Mark Revenues as
Compute percentage of cost of revenues by substituting cost of revenues to
Compute percentage of marketing by substituting marketing to
Compute percentage of technology and development by substituting technology and development to
Compute general and administrative expenses by substituting general and administrative expenses to
Compute percentage of operating income by substituting operating income to
Compute percentage of interest expense by substituting interest expenses to
Compute percentage of interest and other by substituting interest and other to
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