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Yahoo! reported the following in its 2011 financial statements (in thousands): (in millions) December 31, 2010...

Yahoo! reported the following in its 2011 financial statements (in thousands): (in millions) December 31, 2010 December 31, 2011 Total assets $14,928,104 $14,782,786 Revenues $6,324,651 $4,984,199 Product development expense $1,082,176 $1,005,090 Net income $1,244,628 $1,062,669 What is Yahoo's common-sized product development expense for 2011? A. 6.8% B. 20.2% C. 94.6% D. 93.7% E. None of the above

Solutions

Expert Solution

A common size income statement is an income statement in which each account is expressed as a percentage of the value of sales.

Yahoo's common-sized product development expense for 2011 = 1,005,090/ 4,984,199

                                                                                                                   = 0.20165 or 20.2%

Correct answer is B.


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