Pandora Media, Inc. (P) provides Internet music platform services in North America. Pandora€™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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Pandora Media, Inc. Income Statements For the Years Ended January 31 (in thousands) Year 1 Year 2 Revenues: $ 1,072,490 $ 933,305 Advertising.. Subscription. Ticketing service. 225,786 220,571 86,550 10,167 $ 1,384.826 $ 1,164.043 Total revenues.. Expenses: Cost of revenues. Sales and marketing . General and administrative.. Product development . Total expenses... Operating income (loss) $ (894,922) (697,341) (491,455) (398,169) (175,572) (141,636) $ (1,703,585) $ (318,759) (153,943) (84,581) $(1,334,034) $ (169,991)