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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Segment revenue vertical analysis

News Corporation is one of the world’s largest entertainment companies that includes Twentieth Century Fox films, Fox Broadcasting, Fox News, the FX, and various satellite, cable, and publishing properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows:

Chapter 5, Problem 5.26EX, Segment revenue vertical analysis News Corporation is one of the worlds largest entertainment

a. Provide a vertical analysis of the product segment revenue. Round whole percents to one decimal place.

b. Are the revenues of News Corporation diversified or concentrated within a product segment? Explain.

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earned from different segments individually are called segment revenue. Segment revenues are determined from the invoiced data entered into the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Vertical analysis:

Vertical analysis is the method of financial statement analysis, and it is useful for evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing each item on a financial statement with a total amount from the same statement.

To prepare: The vertical analysis statement of the product segment revenue.

Explanation

The vertical analysis statement of the product segment revenue is as follows:

N Corporation
Vertical analysis of various product segment revenue
Major products For a recent year $ Percent
(in millions)
Cable network programming 9,132 27...

(b)

To determine

To analyze: The product segment of N Corporation, and discuss about the diversified or concentrated within the product segment revenue.

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