Please help with question #2 on last page.

186 Chapter 7 Financial Statement Analysis I Chapter 7 CASE 7-1 Orville Wright analyzes the airline industry. Investors with an interest in or lending to airlines seek his advice and recommendations. Amelia Earhart, Orville's wealthiest client, asked him to determine which of two airlines oTered her the better investment opportu nity at the end of 2018. Amelia's interest centered on two of the so-called discount airlines. West Airlines was created after the United States deregulated the airline industry. Prior to deregula tion, airlines priced tickets on a cost-plus basis. This arrangement allowed carriers to reoover all of their costs and eam acceptable profit margins and returns on investment In this environment older legacy carriers, such as American, Delta, and United, did not have an incentive for containing costs. The air carriers merely passed on those cost to their passengers in the form of ever escalating ticket prices. Mounting pressure from the public spurred Congress to substantially deregulate the passenger airline industry in the late 1970s Sensing an opportunity to capitalie on airline deregulation, investors formed West Airlines. This post-regulatory start-up's business model focused on containing costs, such as non-unionized labor, and passing the cost savings on to their passengers in the form of lower ticket prices. The strategy proved financially successful as West gained market share from the legacy carriers and stimulated demand in consumers who previously did not utilize air travel. The financial success of West spawned other discount competitors, the most successful of which was jetGreen Airlines Amelia Earhart wanted to purchase stock in either West or jetGreen. She paid Orville Wright for his analysis and recommendation. Orville begins his assignment by gathering the most recent francul statements for West and jet Green Airlines (amounts in m?ions, except earnings per share)