QUESTIONS: 1. 2. 3. 4. 5. 6. Identify and evaluate the key elements of PPD's business strategy. Make sure that you understand the product that they are selling and how they go about selling it. Identify the problem revealed by the third quarter earnings announcement that resulted in PPD's stock price drop. What was the cause of this problem? Why didn't the problem affect PPD's accounting earnings? Suggest an alternative method of accounting for the transactions that led to the problem identied in part [2) above and recompute PPD's earnings for the third quarter of 1999 using this method. Do you think that earnings computed using the method you identied in part (3) above provide a better or a worse indication ofPPD's actual performance? What actions would you advise PPD's management take in response investors' reaction to the third quarter earnings announcement? What information would you seek from PPD's subsequent press releases and SEC lings in order to detemiine whether the price reaction to the 3rd quarter announcement was warranted