The following financial information (in millions) is for two major corporations for three fiscal years ended December 31:

Instructions

a. Calculate return on assets and return on equity for each company for 2017 and 2016. Comment on whether their ratios have improved or deteriorated.

b. Compare Husky?s ratios with Suncor?s.

c. The five-year industry average for return on equity is 9.27%. Compare the two companies? performance with the industry average.

Taking It Further

Using your findings in this question to illustrate, explain why it is important to use comparisons in evaluating ratios.

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2017 2016 2015 Husky Energy Inc. Profit (loss) Shareholders' equity Total assets Suncor Energy Inc. Profit (loss) Shareholders' equity Total assets $ (3,850) 16,586 33,056 $ 786 $ 922 17,627 32,260 17,967 32,927 $ 4,458 45,383 89,494 $ (1,995) 39,039 77,527 $ 445 44,630 88,702