Assume the average price of a litre of gas in 2017 jumped $0.17 (16 percent) from $1.04 in 2016 to $1.21 in 2017. Let?s see whether this change is reflected in the income statement of Suncor Energy Inc. for the year ended December 31, 2017 (amounts in billions).

Required:

1. Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages (rounded to one decimal place). How did the change in gas prices compare to the changes in Suncor?s total revenues and costs of crude oil and products?

2. Conduct a vertical analysis by expressing each line as a percentage of total revenues (round to one decimal place). Excluding income tax and other operating costs, did Suncor earn more profit per dollar of revenue in 2017 compared to 2016?

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2017 2016 Total Revenues $273 $221 171 Costs of Crude Oil and Products 133 Other Operating Costs 59 56 32 Income Before Income Tax Expense 43 Income Tax Expense 19 13 $ 19 $ 24 Net Income