a) A vertical analysis of the income statement for AT&T is as follows:
AT&T Percent
Revenue $132,447 100%
Cost of Services (Expenses) 60,611 45.8%
Selling & Marketing Expense 39,697 30.0%
Depreciation & other expenses 20,393 15.4%
Operating Income $11,746 8.9%
b) A vertical analysis of the income statement for Verizon is as follows:
Verizon Percent
Revenue $127,079 100%
Cost of Services (Expenses) 49,931 39.3%
Selling & Marketing Expense 41,016 32.3%
Depreciation & other expenses 16,533 13.0%
Operating Income $19,599 15.4%
<h3>What is a vertical analysis?</h3>
A financial statement vertical analysis is a comparison of each line item on the financial statement as a percentage of the base figure.
For the income statement, the base figure is the revenue, which is set to 100%. For the balance sheet, the base figure is the total assets or total liabilities and equity, which are set to 100%.
The vertical analysis uses the following formula = Financial statement line item divided by the total base figure X 100.
AT&T Percent
Revenue $132,447 100% ($132,447/$132,447 x 100)
Cost of Services (Expenses) 60,611 45.8% ($60,611/$132,447 x 100)
Selling & Marketing Expense 39,697 30.0% ($39,697/$132,447 x 100)
Depreciation & other expenses 20,393 15.4% ($20,393/$132,447 x 100)
Operating Income $11,746 8.9% ($11,746/$132,447 x 100)
Verizon Percent
Revenue $127,079 100% ($127,079/$127,079 x 100)
Cost of Services (Expenses) 49,931 39.3% ($49,931/$127,079 x 100)
Selling & Marketing Expense 41,016 32.3% ($41,016/$127,079 x 100)
Depreciation & other expenses 16,533 13.0% ($16,533/$127,079 x 100)
Operating Income $19,599 15.4% ($19,599/$127,079 x 100)
Learn more about the vertical analysis at brainly.com/question/14115729
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