Question
The average price of a gallon of gas in 2013 dropped $0.12 (3 percent) from $3.61 in 2012 (to $3.49 in 2013). Lets see whether
The average price of a gallon of gas in 2013 dropped $0.12 (3 percent) from $3.61 in 2012 (to $3.49 in 2013). Lets see whether these changes are reflected in the income statement of Chevron Corporation for the year ended December 31, 2013 (amounts in billions).
2013 | 2012 | |||||
Total Revenues | $ | 295 | $ | 309 | ||
Costs of Crude Oil and Products | 123 | 126 | ||||
Other Operating Costs | 57 | 52 | ||||
Income before Income Tax Expense | 115 | 131 | ||||
Income Tax Expense | 25 | 31 | ||||
Net Income | $ | 90 | $ | 100 | ||
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1-a. Compute the gross profit percentage for each year. (Round your answers to 1 decimal place.) 1-b. Assuming that the change from 2012 to 2013 is the beginning of a sustained trend, is Chevron likely to earn more or less gross profit from each dollar of sales in 2014?
More Gross Profit | |
Less Gross Profit |
2-a. Compute the net profit margin for each year. (Round your percentage answers to 1 decimal place.) 2-b. Did Chevron do a better or worse job of controlling expenses, other than the costs of crude oil and products, in 2013 relative to 2012?
Better Job | |
Worse Job |
3-a. Chevron reported average net fixed assets of $240 billion in 2013 and $166 billion in 2012. Compute the fixed asset turnover ratios for both years. (Round your answers to 2 decimal places.) 3-b. Did the company better utilize its investment in fixed assets to generate revenues in 2013 or 2012?
2013 | |
2012 |
4-a. Chevron reported average stockholders equity of $230 billion in 2013 and $166 billion in 2012. Compute the return on equity ratios for both years. (Round your percentage answers to 1 decimal place.) 4-b. Did the company generate greater returns for stockholders in 2013 or 2012?
2013 | |
2012 |
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