A condensed income statement for Southwest Airlines and a partially completed vertical analysis follow.

Required:

1. Complete the vertical analysis by computing each line item (a)–(f) as a percentage of sales revenues. Round to the nearest whole percentage.
2. Does the percentage that you calculated in 1(a) and (e) suggest that fuel costs, as a percentage of sales, decreased, increased, or stayed the same in 2016 compared to 2015?
3. Refer to the percentages that you calculated in 1(c) and (f). Is Southwest’s net profit margin improving, declining, or staying the same?

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SOUTHWEST AIRLINES Income Statement (summarized) For the Year Ended December 31 (in millions of U.S. dollars) 2016 2015 Sales Revenues $20,425 6,798 100% $19,820 6,383 100% Salaries and Wages Expense Fuel, Oil, Repairs, and 34 d Maintenance 4,692 5,175 4,621 4,700 637 a e 24 Other Operating Expenses Other Expenses (Revenues) Income before Income Tax Expense Income Tax Expense b 213 1 3 3,547 1,303 $ 2,244 3,479 1,298 $ 2,181 17 18 6 7 Net Income c% f%