Reproduced below are portions of the president€™s letter to shareholders and selected income statement and balance sheet data for the Wright Brothers Aviation Company. Wright Brothers is a national airline that provides both passenger service and package delivery service. To Our Stockholders: In 2011, the airline industry began to show some life. As fuel prices leveled and travelers showed an increased willingness to fly domestically, it was generally perceived that a gradual recovery was in place. The worldwide increase in the demand for air travel throughout the year translated into improved demand for the Company€™s services. In fact, revenues for both the passenger and package segments improved in every quarter of 2011. Most importantly, the Company started generating cash from operations in the last half of the year, and the passenger segments returned to generating profits in the third quarter.. With improved operating performance as the basis for negotiating a financial restructuring, the next critical step for the Company is to satisfactorily restructure its obligations in order to insure that the Company can operate effectively in the future. With that in mind, a strategic decision, albeit a difficult one, was made in February 2011€”the Company filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code....

Required:
1. What trends do you detect in revenues, operating income, and net income for the period 2007€“2011?
2. What happened to working capital over the 2007€“2011 period? To what do you attribute this result?
3. The price of Wright Brothers stock declined steadily throughout the 2007€“2011 period. Do you consider this decline to be a reasonable reaction to the financial results reported? Why or why not?

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2011 2010 2 2009 2007 Revenues: Passenger services 141,343 $136,057 $354,246 390,080 337,871 35,199 60,968 145,940 203,675 202,615 176,542 197,025 500,186 593,755 540 486 (54,584 2,1 6,663) 52,137 39,527 (182,647) (340,516 67,269) (14,553 22,461) 123,553 134,009 183,268 93,943 209,944 542,523 678,846 952,623 1,040,903 1,133,498 698,583641,645 542,640 29,369 20,960 116,572 119,481 144,297 576,446 655,383 Stockholdersequity (272,632 (82,280 265,686 335,088 357,155 Package services Total revenues Operating income Net income loss Current assels Total assets Current liabilities Longterm debt