The following condensed financial information is available for WestJet Airlines:

Instructions

a. Perform a horizontal percent of base year analysis of WestJet?s income statement and balance sheet, assuming 2013 is the base year.

b. Using the analyses you prepared in part (a), identify any significant changes between 2013 and 2016.

c. Which do you think would be more useful?percent of the base-year amount or calculating the percentage change between periods?to analyze WestJet between 2013 and 2016? Explain.

Taking It Further

WestJet?s financial information presented was prepared using IFRS. The financial information provided in 2016 was prepared before IFRS required leased assets and the related liabilities to be included on the balance sheet. WestJet?s 2016 financial statements indicate this expected change will have a material impact on its financial statements. Assuming this change will result in significant leased assets and related liabilities appearing on WestJet?s balance sheet, how will this impact WestJet?s ratios?

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WESTJET AIRLINES LTD. Consolidated Statement of Earnings Year Ended December 31 (in millions) 2016 2015 2014 2013 $4,029 $3,976 $3,662 Revenue $4,123 3,683 Operating expenses 3,459 3,501 3,263 Profit from operations Other expenses 440 570 475 399 24 50 85 27 Profit before income taxes 416 520 390 372 Income tax expense 121 153 106 103 S 295 $ 367 Profit $ 284 $ 269 WESTJET AIRLINES LTD. Balance Sheet December 31 (in thousands) 2015 Assets 2016 2014 2013 Current assets $1,966 $1,502 3,627 $1,730 $1,526 Non-current assets 4,198 $6,164 2,916 2,617 Total assets $5,129 $4,646 $4,143 Liabilities and Shareholders' Equity Current liabilities Non-current liabilities $1,621 $1,552 $1,338 $1,406 2,482 1,617 1,531 1,147 Total liabilities 4,103 3,169 2,869 2,553 Shareholders' equity 1,960 2,061 1,777 1,590 Total liabilities and shareholders' equity $6,164 $5,129 $4,646 $4,143