Netflix, Inc. (NFLX) provides Internet streaming services featuring TV series, documentaries, and films throughout the world. Netflix’s income statements through operating income for two recent years are as follows (in thousands):

a. Prepare a vertical analysis of the two income statements.
b. Interpret the vertical analysis.

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Netflix, Inc. Income Statements For the Years Ended December 31 (in thousands) Year 2 Year 1 Revenues..... ... $ 20,156,447 $ 15,794,341 Operating expenses: Cost of revenues.. $(12,440,213) $ (9,967,538) Marketing.. Technology and development... General and administrative.. (2,652,462) (2,369,469) (1,545,149) (1,221,814) (914,369) (630,294) Total operating expenses. Operating income.... $(17,552,193) $ 2,604,254 $(14,189,115) $ 1,605,226