Vertical analysis Amazon.com, Inc.is the largest Internet retailer in the United States. Amazon's income statements through income from operations for two recent years are as follows (in mH!ions): Amazon.com,Inc. Operating Income Statements For the Years Ended December 31 (in millions) Year 2 Year 1 Product sales $70,080 $60,903 Service sales 18,908 13,549 Total sales $88,988 $74,452 Cost of sales $62,752 $54,181 Fulfillment 10,766 8,585 Marketing 4,332 3,133 Technology and content 9,275 6,565 General and administrative 1,552 1,129 Other operating expense (income), net 133 114 Total operating expenses $88,810 $73,707 Income from operations $ 178 $ 745 1.Prepare a vertical analysis of the two operating income statements.Round percentages to one decimal pl 2.Use the vertical analysis to explain the decrease in income from operations.
Vertical analysis
Amazon.com, Inc.is the largest Internet retailer in the United States. Amazon's income statements through income from operations for two recent years are as follows (in mH!ions):
|
Amazon.com,Inc.
Operating Income Statements For the Years Ended December 31 (in millions) |
||
|
|
Year 2 |
Year 1 |
|
Product sales |
$70,080 |
$60,903 |
|
Service sales |
18,908 |
13,549 |
|
Total sales |
$88,988 |
$74,452 |
|
Cost of sales |
$62,752 |
$54,181 |
|
Fulfillment |
10,766 |
8,585 |
|
Marketing |
4,332 |
3,133 |
|
Technology and content |
9,275 |
6,565 |
|
General and administrative |
1,552 |
1,129 |
|
Other operating expense (income), net |
133 |
114 |
|
Total operating expenses |
$88,810 |
$73,707 |
|
Income from operations |
$ 178 |
$ 745 |
1.Prepare a vertical analysis of the two operating income statements.Round percentages to one decimal pl
2.Use the vertical analysis to explain the decrease in income from operations.
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