Solution-Prepare a horizontal common-size consolidated

Prepare a horizontal common-size consolidated statement

Reference no: EM13553394

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Yahoo* included these statements in its 2008 annual report:

YAHOO! INC. CONSOLIDATED STATEMENTS OF INCOME
	Years Ended December 31,
	2006	2007	2008
Revenues
Cost of revenues	$6,425,679	$6,969,274	$7,208,502
Gross profit	2,675,723	2,838,758	3,023,362
	3,749,956	4,130,516	4,185,140
Operating expenses:
Sales and marketing	1,322,259	1,610,357	1,563,313
Product development	833,147	1,084,238	1,221,787
General and administrative	528,798	633,431	705,136
Amortization of intangibles	124,786	107,077	87,550
Restructuring charges, net	-	-	106,854
Goodwill impairment charge	-	-	487,537
Total operating expenses	2,808,990	3,435,103	4,172,177
Income from operations	940,966	695,413	12,963
Other income, net	157,034	154,011	82,838
Income before provision for income taxes, earnings in equity interests, and minority interests	1,098,000	849,424	95,801
Provision for income taxes	458,011	337,263	262,717
Earnings in equity interests	112,114	150,689	596,979
Minority interests in operations of consolidated subsidiaries	712	2,850	5,765
Net income	$751,391	$660,000	$424,298
Net income per share basic	$0.54	$0.49	$0.31
Net income per share diluted	$0.52	$0.47	$0.29
Shares used in per share calculation basic	1,388,741	1,338,987	1,369,476
Shares used in per share calculation diluted	1,457,686	1,405,486	1,400,101
Stock-based compensation expense by function:
Cost of revenues	$6,621	$10,628	$13,813
Sales and marketing	155,084	246,472	182,826
Product development	144,807	218,207	178,091
General and administrative	118,418	97,120	63,113
Restructuring expense reversals	-	-	-30,236
Total stock-based compensation expense	$424,930	$572,427	$407,607

YAHOO! INC. CONSOLIDATED BALANCE SHEETS
	December 31,
	2007	2008
	(In thousands, except par values)
ASSETS
Current assets:
Cash and cash equivalents	$1,513,930	$2,292,296
Short-term marketable debt securities	487,544	1,159,691
Accounts receivable, net of allowance of $46,521 and $51,600, respectively	1,055,532	1,060,450
Prepaid expenses and other current assets	180,716	233,061
Total current assets	3,237,722	4,745,498
Long-term marketable debt securities	361,998	69,986
Property and equipment, net	1,331,632	1,536,181
Goodwill	4,002,030	3,440,889
Intangible assets, net	611,497	485,860
Other long-term assets	503,945	233,989
Investments in equity interests	2,180,917	3,177,445
Total assets	$12,229,741	$13,689,848

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$176,162	$151,897
Accrued expenses and other current liabilities	1,006,188	1,139,894
Deferred revenue	368,470	413,224
Short-term debt	749,628	-
Total current liabilities	2,300,448	1,705,015
Long-term deferred revenue	95,129	218,438
Capital lease and other long-term liabilities	28,086	77,062
Deferred and other long-term tax liabilities, net	260,993	420,372
Commitments and contingencies	-	-
Minority interests in consolidated subsidiaries	12,254	18,019
Stockholders' equity:
Preferred stock, $0.001 par value, 10,000 shares authorized; none issued or outstanding
Common stock, $0.001 par value; 5,000,000 shares authorized; 1,534,893 and 1,600,220 shares issued, respectively, and 1,330,828 and 1,391,560 shares outstanding, respectively	1,527	1,595
Additional paid-in capital	9,937,010	11,548,393
Treasury stock at cost, 204,065 and 208,660 shares, respectively	5,160,772	5,267,484
Retained earnings	4,423,864	4,848,162
Accumulated other comprehensive income	331,202	120,276
Total stockholders' equity	9,532,831	11,250,942
Total liabilities and stockholders' equity	$12,229,741	$13,689,848

Required

a. Compute the following for 2009 and 2008:

1. Net profit margin

2. Total asset turnover (use year-end total assets)

3. Return on assets (use year-end total assets)

4. Operating income margin

5. Return on operating assets (use year-end operating assets).

6. Sales to fixed assets (use year-end operating assets)

7. Return on total equity (use year-end total equity)

8. Gross profit margin

b. Comment on the trends in (a)

1. Prepare a horizontal common-size consolidated statement of operations for 2006-2008. Use 2006 as the base.

2. Comment on the results in (1).

Reference no: EM13553394

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Prepare a horizontal common-size consolidated statement

Reference no: EM13553394

Reference no: EM13553394

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