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

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.

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

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.

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