Segment Analysis Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earned from different segments individually are called segment revenue. Segment revenues are determined from the invoiced data entered into the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons. Vertical analysis: Vertical analysis is the method of financial statement analysis, and it is useful for evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing each item on a financial statement with a total amount from the same statement. To prepare: The vertical analysis statement of the product segment revenue.

Question

Segment Revenue Vertical Analysis Newton Corporation is one of the world's largest entertainment companies that includes Gravity films, Apple Broadcasting, Gravity News, the GR, and various satellite properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows: a. Using the revenue disclosures by major product segment listed below, provide a vertical analysis of the product segment revenues. Round all percents to one decimal place. For a Recent Year Major Product Segments (in millions) Percent (%) Cable Network Programming $23,925 Television 8,338 Filmed Entertainment 5,154 Direct Broadcast Satellite Television 4,483 Total revenues of major segments $41,900 %

Answer 1

Question

Chapter 5, Problem 5.26EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earned from different segments individually are called segment revenue. Segment revenues are determined from the invoiced data entered into the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Vertical analysis:

Vertical analysis is the method of financial statement analysis, and it is useful for evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing each item on a financial statement with a total amount from the same statement.

To prepare: The vertical analysis statement of the product segment revenue.

(b)

To determine

To analyze: The product segment of TCF Incorporation, and discuss about the diversified or concentrated within the product segment revenue.

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Segment Revenue Vertical Analysis Newton Corporation is one of the world's largest entertainment companies that includes Gravity films, Apple Broadcasting, Gravity News, the GR, and various satellite properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows: a. Using the revenue disclosures by major product segment listed below, provide a vertical analysis of the product segment revenues. Round all percents to one decimal place. For a Recent Year Major Product Segments (in millions) Percent (%) Cable Network Programming $23,925 Television 8,338 Filmed Entertainment 5,154 Direct Broadcast Satellite Television 4,483 Total revenues of major segments $41,900 %

Twenty-First Century Fox, Inc. is one of the world's largest entertainment companies that includes Twentieth Century Fox films, Fox Broadcasting, Fox News, the FX, and various satellite properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows: For a Recent Year Major Product Segments (in millions) Cable Network Programming $13,773 Television 4,895 Filmed Entertainment 9,525 Direct Broadcast Satellite Television 2,112 Total revenues of major segments $30,305 a. Provide a vertical analysis of the product segment revenue. Round whole percents to one decimal place. b. Are the revenues of Twenty-First Century Fox, Inc. diversified or concentrated within a product segment? Explain.

Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc. (TWX), for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Time Warner, Inc. Segment Revenues (in millions) Turner (cable networks and digital media) $11,364 Home Box Office (pay television) 5,890 Warner Bros. (films, television, and videos) 13,037 Assume that the variable costs as a percent of sales for each segment are as follows: 40% Turner Home Box Office 35% Warner Bros 25% a. Determine the contribution margin and contribution margin ratio. Enter amounts in millions. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to the nearest whole percent for each segment from the information given.