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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 45
Vertical Analysis of an Income Statement
A condensed income statement for Electronic Arts and a partially completed vertical analysis follow.
Required:
1. Complete the vertical analysis by computing each line item ( a )-( d ) as a percentage of net revenues. Round to the nearest whole percentage.
TIP: Research and Development was 32 percent of net revenues in 2009, which was computed as (1,359 ÷ 4,212) × 100.
2. Does Electronic Arts' 2010 Cost of Goods Sold, as a percentage of Net Revenues, represent better or worse performance as compared to 2009
A condensed income statement for Electronic Arts and a partially completed vertical analysis follow.
Required:
1. Complete the vertical analysis by computing each line item ( a )-( d ) as a percentage of net revenues. Round to the nearest whole percentage.
TIP: Research and Development was 32 percent of net revenues in 2009, which was computed as (1,359 ÷ 4,212) × 100.
2. Does Electronic Arts' 2010 Cost of Goods Sold, as a percentage of Net Revenues, represent better or worse performance as compared to 2009
Explanation
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Vertical Analysis:
Vertical analysis is...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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