Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Textbook Question
Chapter 5, Problem 5.25EX
Segment revenue horizontal analysis
Starbucks Corporation reported the following geographical segment revenues for a recent and a prior fiscal year:
| Recent Year (in millions, rounded) | Prior Year (in millions, rounded) | |
| Americas | $13,293 | $11,980 |
| EMEA* | 1,217 | 1,295 |
| China/Asia Pacific | 2,396 | 1,130 |
| Channel Development** | 1,731 | 1,546 |
| Other | 526 | 497 |
| Total | $19,163 | $16,448 |
*Europe, Middle East, and Africa
**Sells packaged coffee and teas globally
- a. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round whole percents to one decimal place.
- b. Prepare a vertical analysis of the segment data. Round whole percents to one decimal place.
- c. What conclusions can be drawn from your analyses?
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Starship Corporation reported the following geographical segment revenues for a recent and a prior fiscal year:
Recent Year(in millions, rounded)
Prior Year(in millions, rounded)
Americas
$10,479
$8,073
EMEA*
1,217
1,295
China/Asia Pacific
2,396
1,130
Channel Development**
1,731
1,546
Other
2,236
1,695
Total
$18,059
$13,739
*Europe, Middle East, and Africa
**Sells packaged coffee and teas globally
a. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round all percents to one decimal place. Enter all amounts in millions. If required, use minus sign to indicate the decreasing values.
Starship Corporation
Horizontal Analysis
Recent Year (in millions)
Prior Year (in millions)
Increase (Decrease)Amount
Increase (Decrease)Percent
Americas
$10,479
$8,073
$fill in the blank 15396ff9101df9f_1
fill in the blank 15396ff9101df9f_2%
EMEA
1,217
1,295
fill in the blank 15396ff9101df9f_3
fill…
Payton Company has the following segment revenues for the two most recent fiscal years.
Segment
Current Year (in millions)
Prior Year (in millions)
China
$790
$640
Canada
330
242
Other countries
213
167
Total revenues
$1,333
$1,049
Prepare a vertical analysis of the segment data. Calculate the percentage to four decimal places, then round your answer to one decimal place. For percentages, do not enter the percent sign.
Payton Company
Vertical Analysis
Segment
Current Year Amount (in millions)
Current Year Percent
Prior Year Amount (in millions)
Prior Year Percent
China
$790
%
$640
%
Canada
330
242
Other countries
213
167
Total revenues
$1333
%
$1049
%
Vertical analysis income statement Revenue expense data for Innovation quarter Inc for two recent years as follows.
Sales
Cost of goods.
Selling expenses
Administrative expenses
Income tax expense
Current year.
4,000,000
2,280,000
600,000
520,000
240,000
Previous year
3,600,000
1,872,000
648,000
360,000
216,000
A. Prepare an income statement in comparative form, stating to each item for both of years as a percent of sales. Round to the nearest whole percentage.
Innovation quarter Inc comparative income tax for the years ended December 31st
Sales
Cost of goods
Selling expenses
Administrative expenses
Income tax expense
$ % $ %
$ % $ %
$ % $ %
$ % $ %
B. The vertical analysis indicates that the cost of the goods sold as a percent of sales by 5 percentage points, while selling expenses by 3% percentage and administrative expenses by 3% percentage points. Thus net income as…
Chapter 5 Solutions
Accounting
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