FIN 402 MASTER 1 Predictable World / fin402master.com FIN 402 MASTER 1 Predictable World / fin402master. | Page 37

stock, you can bet I’m going to learn as much as I can about the
company.‖ Jack prefers to compute his own ratios even though he
could easily obtain analytical reports from his broker at no cost. (In
fact, Bob Smith, his broker, has been volunteering such services for
years.) Recently Jack has been keeping an eye on a small chemical
stock. The firm, South Plains Chemical Company, is big in the
fertilizer business—which is something Jack knows a lot about. Not
long ago, he received a copy of the firm’s latest financial statements
(summarized here) and decided to take a closer look at the company.
Questions a.
Using the South Plains Chemical Company figures,
compute the following ratios. b. Compare the company ratios you
prepared to the industry figures given in part a. What are the
company’s strengths? What are its weaknesses? c. What is your
overall assessment of South Plains Chemical? Do you think Jack
should continue with his evaluation of the stock? Explain.
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FIN 402 Week 3 AssignmentCase Problem 7.2 Doris
Looks at an Auto Issue
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Case Problem 7.2 Doris Looks at an Auto Issue Doris Wise is a young
career woman. She lives in Phoenix, Arizona, where she owns and
operates a highly successful modeling agency. Doris manages her
modest but rapidly growing investment portfolio, made up mostly of
high-grade common stocks. Because she’s young and single and has
no pressing family requirements, Doris has invested primarily in
stocks that offer the potential for attractive capital gains. Her broker
recently recommended an auto company stock and sent her some