Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Question
Chapter 7, Problem 2MAD
a.
To determine
Prepare a vertical analysis of the sales as a percent of total sales for the three segments, and identify the segment which has highest percentage of total sales.
b.
To determine
Determine the earnings before interest, taxes, depreciation, and amortization (EBITDA) for the three segments.
c.
To determine
Determine the EBITDA as a percent of sales (EBITDA margin) for the three segments.
d.
To determine
Interpret the analysis in EBITDA margin calculated in Part C.
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Students have asked these similar questions
Analyze Yum! Brands by segment
Yum! Brands, Inc. (YUM) is a worldwide operator and franchisor of fast-food restaurants, under the familiar brands of KFC, Pizza Hut, and Taco
Bell. Segment revenues, operating income, and depreciation and amortization expense for Yum!'s operating segments are provided for a recent
year as follows (in millions):
Depreciation and
Sales
Operating Income
Segment
Amortization Expense
$3,232
$874
$173
KFC
Pizza Hut
1,111
370
36
Taco Bell
2,025
593
91
a. Prepare a vertical analysis of the sales as a percent of total sales for the three segments. Round percentages to the nearest whole
percent.
Segment
Percentage of Total
Revenue
КFC
Pizza Hut
Taco Bell
$
Total
Which segment has the greatest percentage of total sales?
The comparative segment revenues for Yum! Brands, a global quick-serve restaurant
company, are as follows:
Recent Year
Prior Year
(in millions)
(in millions)
$ 6,909
$ 6,934
China
KFC
2,948
3,193
Pizza Hut
1,145
1,148
Taco Bell
1,863
1,988
India
115
141
Total
$13,105
$13,279
a. Provide a horizontal analysis of the segment revenues using the prior year as the base
year. Round whole percents to one decimal place.
b. Provide a vertical analysis of the segment revenues for both years. Round whole percents
to one decimal place.
c. What conclusions can be drawn from your analyses?
Game-On Sports operates in two distinct segments: athletic equipment and accessories. The income statement for each operating segment is presented below.Required:1. Complete the "%" columns to be used in a vertical analysis of Game-On Sports’ two operating segments. Express each amount as a percentage of sales. (Round your percentage answers to 1 decimal place.)
GAME-ON SPORTS
Income Statement
For the Year Ended December 31, 2021
Athletic Equipment
Accessories
Amount
%
Amount
%
Net sales
$2,800,000
$3,250,000
Cost of goods sold
1,250,000
1,620,000
Gross profit
1,550,000
1,630,000
Operating expenses
650,000
700,000
Operating income
900,000
930,000
Other income (expense)
75,000
(10,000)
Income before tax
975,000
920,000
Income tax expense
225,000
200,000
Net income
$750,000
$720,000
2. Use vertical analysis to compare the profitability of the two operating segments. Which segment is more…
Chapter 7 Solutions
Managerial Accounting
Ch. 7 - What types of costs are customarily included in...Ch. 7 - Which type of manufacturing cost (direct...Ch. 7 - Which of the following costs would be included in...Ch. 7 - In the variable costing income statement, how are...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Discuss how financial data prepared on the basis...Ch. 7 - Prob. 8DQCh. 7 - Explain why rewarding sales personnel on the basis...Ch. 7 - Explain why service companies use different...
Ch. 7 - Variable costing Marley Company has the following...Ch. 7 - Prob. 2BECh. 7 - Variable costingsales exceed production The...Ch. 7 - Prob. 4BECh. 7 - Contribution margin by segment The following...Ch. 7 - At the end of the first year of operations, 21,500...Ch. 7 - Gallatin County Motors Inc. assembles and sells...Ch. 7 - Fresno Industries Inc. manufactures and sells...Ch. 7 - On March 31, the end of the first month of...Ch. 7 - On April 30, the end of the first month of...Ch. 7 - On October 31, the end of the first month of...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Estimated income statements, using absorption and...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Prob. 10ECh. 7 - Explain why service companies use different...Ch. 7 - Galaxy Sports Inc. manufactures and sells two...Ch. 7 - Prob. 13ECh. 7 - Sales territory and salesperson profitability...Ch. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Variable costing income statement for a service...Ch. 7 - Variable costing income statement for a service...Ch. 7 - Prob. 1PACh. 7 - The demand for solvent, one of numerous products...Ch. 7 - During the first month of operations ended May 31,...Ch. 7 - Salespersons report and analysis Walthman...Ch. 7 - Segment variable costing income statement and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Income statements under absorption costing and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Prob. 4PBCh. 7 - Variable costing income statement and effect on...Ch. 7 - Prob. 1MADCh. 7 - Prob. 2MADCh. 7 - Prob. 3MADCh. 7 - Segment disclosure by Apple Inc. (AAPL) provides...Ch. 7 - Prob. 1TIFCh. 7 - Inventory effects under absorption costing BendOR,...Ch. 7 - Communication Bon Jager Inc. manufactures and...Ch. 7 - Prob. 1CMACh. 7 - Chassen Company, a cracker and cookie...Ch. 7 - Prob. 3CMACh. 7 - Bethany Company has just completed the first month...
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