The average price of a gallon of gas in 2018 increased $0.30 (12.4 percent) from $2.42 in 2017 to $2.72 in 2018. Lets see whether these changes are reflected in the income statement of Chevron Corporation for the year ended December 31, 2018 (amounts in billions). 2018 2017 Revenues $ 166 $ 142 Costs of Purchased Crude Oil and Products 95 76 Other Operating Costs 50 57 Income before Income Tax Expense 21 9 Income Tax Expense 6 Net Income $ 15 $ 9

Required: Compute the gross profit percentage for each year. Assuming that the change from 2017 to 2018 is the beginning of a sustained trend, is Chevron likely to earn more or less gross profit from each dollar of sales in 2019? Compute the net profit margin for each year. Did Chevron do a better or worse job of controlling expenses other than the costs of crude oil and products in 2018 relative to 2017. Chevron reported average net fixed assets of $342 billion in 2018 and $340 billion in 2017. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017? Chevron reported average stockholders equity of $152 billion in 2018 and $148 billion in 2017. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2018 or 2017?