E17-1 Preparing and Interpreting a Horizontal (Trend) Analysis The average price of a gallon of gas in 2005 jumped $0.43 (24 percent) from $1.81 in 2004 to $2.24 in 2005. Let’s see whether these changes are reflected in the income statement of Chevron Corp. for the year ended December 31, 2005 (amounts in millions).

2005 2004 Total revenues $198,200 $155,300 Costs of crude oil and products 140,902 104,948 Other operating costs 32,101 29,801 Income before income tax expense 25,197 20,551 Income tax expense 11,098 7,223 Net income $ 14,099 $ 13,328 Required: Conduct a horizontal analysis by calculating the year-to-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 Chevron Corp.’s total revenues and costs of crude oil and products?