Assignment $-$ Analysis of Financial Statements

Southern Supply Inc.

Southern assembles computers in the owner's garage from parts the owner orders over the Internet. This industry is characterized by ow barriers to entry, including few operating licenses or governmental approvals, and small investments in productive equipment or facilities.

would you expect this situation to affect the assessment of Southern's financial condition and performance?

Although nonquantitative factors may be relevant to a company's financial evaluation in general terms, the details of this specific situ are not relevant to the firm's financial condition or performance.

Its low barriers to entry expose Southern to decreased risk of competition, which could improve the predictability of its expected futu sales revenues.

Its low barriers to entry expose Southern to increased risk of competition, which could negatively affect the predictability of its expec future sales revenues.