Twenty-First Century Fox, Inc. is one of the world’s largest entertainment companies that includes Twentieth Century Fox films

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:

Major Product Segments For a Recent Year (in millions) Cable Network Programming$13,773 Television4,895 Filmed Entertainment9,525 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.

Answer:

a.

Twenty-First Century Fox, Inc.

Major Product Segments

Cable Network Programming $13,773 45.4%

Television4,895 16.2%

Filmed Entertainment9,525 31.4%

Direct Broadcast Satellite Television 2,112 7.0%

Total revenues$30,305 100.0%

b. Twenty-First Century Fox, Inc. is moderately diversified. The Cable Network 

Programming segment has the largest percent of revenues to total revenues at 

45.4%. This segment represents almost half the revenues of the company. 

However, Television and Filmed Entertainment have a percent of revenues to  

total revenues of over 16% and 31%, respectively. Thus, these are significant 

segments suggesting a degree of diversification when all three are considered 

together.

The Direct Broadcast Satellite Television segment is the smallest segment with 

revenues equal to 7% of total revenues and thus provides some minor additional

diversification.