Southern Supply Inc.

As a result of targeting by unethical product liability attorneys, Southern, a small manufacturer of a revolutionary crawfish steamer,

currently has a multimillion$-$dollar class action lawsuit pending.

Although the steamer is completely reliable and safe, one person was injured as a result of using it inappropriately. Other purchasers

have joined the lawsuit in an effort to collect "free" funds.

How 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 situation

are not relevant to the firm's financial condition or performance.

Lawsuits guarantee free advertising and therefore should be guaranteed to increase the firm's current and future sales and profits.

Being small, Southern may lack the financial resources and media$-$management expertise to successfully defend itself in the lawsuit and

the media. This could jeopardize Southern's current and future sales and profits.