Question

The following comparative income statement (in thousands of dollars) for the two recent fiscal years was adapted from the annual report of Motor Speedways Inc., owner and operator of several major motor speedways.

1		Current Year	Previous Year
2	Revenues:
3	Admissions	$93,991.00	$106,074.00
4	Event-related revenue	142,204.00	134,460.00
5	NASCAR broadcasting revenue	189,930.00	179,280.00
6	Other operating revenue	60,875.00	78,186.00
7	Total revenue	$487,000.00	$498,000.00
8	Expenses and other:
9	Direct expense of events	$96,913.00	$100,098.00
10	NASCAR purse and sanction fees	121,263.00	123,006.00
11	Other direct expenses	17,045.00	25,398.00
12	General and administrative	193,339.00	229,578.00
13	Total expenses and other	$428,560.00	$478,080.00
14	Income from continuing operations	$58,440.00	$19,920.00

A.

Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. Rounding instructions

B.

Comment on the significant changes. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. Rounding instructions Motor Speedways Inc. Comparative Income Statement (in thousands of dollars) For the Years Ended December 31 1 Current Year Current Year Previous Year Previous Year 2 Amount Percent Amount Percent 3 Revenues: 4 Admissions $93,991.00 $106,074.00 5 Event-related revenue 142,204.00 134,460.00 6 NASCAR broadcasting revenue 189,930.00 179,280.00 7 Other operating revenue 60,875.00 78,186.00 8 Total revenue $487,000.00 100.0% $498,000.00 100.0% 9 Expenses and other: 10 Direct expense of events $96,913.00 $100,098.00 11 NASCAR purse and sanction fees 121,263.00 123,006.00 12 Other direct expenses 17,045.00 25,398.00 13 General and administrative 193,339.00 229,578.00 14 Total expenses and other $428,560.00 $478,080.00 15 Income from continuing operations $58,440.00 $19,920.00

Answer 1

Motor Speedways Inc.
Comparative Income Statement (in thousands of dollars)
For the Years Ended December 31
1		Current Year	Current Year	Previous Year	Previous Year
2		Amount	Percent	Amount	Percent
3	Revenues:
4	Admissions	$             93,991.00	19.30%	$          106,074.00	21.30%
5	Event-related revenue	$          142,204.00	29.20%	$          134,460.00	27.00%
6	NASCAR broadcasting revenue	$          189,930.00	39.00%	$          179,280.00	36.00%
7	Other operating revenue	$             60,875.00	12.50%	$             78,186.00	15.70%
8	Total revenue	$       487,000.00	100.00%	$       498,000.00	100.00%
9	Expenses and other:
10	Direct expense of events	$             96,913.00	19.90%	$          100,098.00	20.10%
11	NASCAR purse and sanction fees	$          121,263.00	24.90%	$          123,006.00	24.70%
12	Other direct expenses	$             17,045.00	3.50%	$             25,398.00	5.10%
13	General and administrative	$          193,339.00	39.70%	$          229,578.00	46.10%
14	Total expenses and other	$       428,560.00	88.00%	$       478,080.00	96.00%
15	Income from continuing operations	$          58,440.00	12.00%	$          19,920.00	4.00%

2.

i) Company profit margin is increased by 8% and even in decrease in overall revenue, company is earned more profit as previous period.

ii) Statement of Income Statement reflects that the company has work on improvement of its cost efficiency and able to do it by reduced expenses.

iii) Events and Broadcasting Revenues and Expenses are approximately same as previous.

iv) Change in Admission revenue reduced the expenses more than changes.