Using the information below, discuss both the positive and negative trends prese
ID: 2419891 • Letter: U
Question
Using the information below, discuss both the positive and negative trends presented in the company
Suncor Energy Inc.
Income Statement Horizontal Analysis
For the years ending December X, 2012
And December X, 2013 ($ millions)
2013
2012
Amount
Variance
% Change 2013 from 2012
Revenues and Other Income
Operating revenues, net of royalties
39,593
38,107
Other Income
704
419
40,297
38,526
1,771
4.60
Expenses
Purchases of crude oil and products
17,293
17,047
Operating, selling and general
9,447
8,897
Transportation
845
685
Depreciation, depletion, amortization and impairment
4,892
6,446
Exploration
332
309
Gain on disposal of assets
(137)
(44)
Project start-up costs
15
60
Voyageur upgrader project charges
82
-
Financing expenses
1,162
142
33,921
33,542
Earnings before Income Taxes
6,376
4,984
1,392
27,93
Income Taxes
Current
2,083
1,515
Deferred
382
729
2,465
2,244
Net earnings
3,911
2,740
1,171
42,74
Other Comprehensive Income (loss)
Items that may be subsequently reclassified to Profit or Loss:
Foreign currency translation
adjustment
325
(16)
Cash flow hedges reclassified to
net earning
-
(1)
Items That will not be reclassified
to profit or loss:
Actuarial gain (loss) on
employee retirement benefit
plans, net of income taxes.
579
(134)
Other comprehensive Income (loss)
904
(151)
Total Comprehensive Income
4,815
2,589
2,226
85.98
Per Common share
Net earnings-basic
2.61
1.77
Net earning-diluted
2.60
1.76
Cash dividends
0.73
0.50
Suncor Energy Inc.
Balance Sheet Horizontal Analysis
For the years ending December X, 2012
And December X, 2013
2013
2012
Amount
Variance
% Change 2013 from 2012
Assets
Current assets
Cash and cash equivalents
5,202
4,385
Accounts receivable
5,254
5,201
Inventories
3,944
3,697
Income taxes receivable
294
799
Total current assets
14,694
14,082
Property, plant and equipment, net
57,270
55,434
Exploration and evaluation
2,772
3,284
Other assets
422
419
Goodwill & other intangible assets
3,092
3,104
Deferred income taxes
65
78
Total assets
78,315
76,401
1,914
2.50
Liabilities and Shareholders’ Equity
Current liabilities
Short-term debt
798
775
Current portion of long-term debt
457
311
Accounts payable and
accrued liabilities
7,090
6,446
Current portion of provisions
998
856
Income taxes payable
1,263
1,165
Total current liabilities
10,606
9,553
Long-term debt
10,203
9,938
Other long-term liabilities
1,464
2,319
Provisions
4,078
4,932
Deferred income taxes
10,784
10,444
Total liabilities
37,135
37,186
-51
-0.14
Stockholder’s equity
41,180
39,215
1,965
5.01
Total liabilities and equity
78,315
76,401
1,915
2.50
2013
2012
Amount
Variance
% Change 2013 from 2012
Revenues and Other Income
Operating revenues, net of royalties
39,593
38,107
Other Income
704
419
40,297
38,526
1,771
4.60
Expenses
Purchases of crude oil and products
17,293
17,047
Operating, selling and general
9,447
8,897
Transportation
845
685
Depreciation, depletion, amortization and impairment
4,892
6,446
Exploration
332
309
Gain on disposal of assets
(137)
(44)
Project start-up costs
15
60
Voyageur upgrader project charges
82
-
Financing expenses
1,162
142
33,921
33,542
Earnings before Income Taxes
6,376
4,984
1,392
27,93
Income Taxes
Current
2,083
1,515
Deferred
382
729
2,465
2,244
Net earnings
3,911
2,740
1,171
42,74
Other Comprehensive Income (loss)
Items that may be subsequently reclassified to Profit or Loss:
Foreign currency translation
adjustment
325
(16)
Cash flow hedges reclassified to
net earning
-
(1)
Items That will not be reclassified
to profit or loss:
Explanation / Answer
1.Revenues and Other Income : Favorable because of Operating revenue and other income also increased
2. EBIT: Favorable because Earnings also increased because decrease in depreciation
3. Net Earnings: Favorable because There is decrease in deferred tax
4.Total Comprehensive Income: Favorable becauseThere is Foreign currency translation Adjustment gain and Actuarial gain on employee retirement benefit plans, net of income taxes.
5. Total assets: Favorable because there is increase in current assets except tax , Property, plant and equipment, net, Other assets,
6. Total liabilities: Favourable because there is reduction in current Liability Reason there is reduction in Other long-term liabilities and provisions
7. Stockholder’s equity: Favourable because of increase In stock holder’s equity assuming retained earnings increased
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