To complete the assignments listed below, refer to the CVs annual report and the financial statements of Southwest Airlines Co. in the Supplement to Chapter 16.

1. Prepare a table that shows the net amount each company spent on property and equipment (from the statement of cash flows), the net amount of its property and equipment (from the balance sheet), and the percentage of net amount spent to the net amount of property and equipment for each of the past two years. (Round percentages to one decimal place.) In which company did the amount of property and equipment grow more rapidly?

2. Calculate free cash flow for both companies for the past two years. What conclusions can you draw about each company’s need to raise funds from debt and equity and its ability to grow?