Use data from the Standard & Poor's Market Insight Database at www.mhhe.com/edumarketinsight to answer the following questions. - Find the Industry Profiles from Market Insight for the Photographic Products and Pharmaceuticals industries. Compare the industries' price/book ratios to each other and to the composite ratio for the S&P 500. Do the differences make sense in light of their different stages in the industry life cycle?
- Compare the price/earnings ratios for the two industries to each other and to the S&P 500 composite ratio. How do the ratios reflect the life cycle stages of the industries? Look at the 1-year, 3-year, and 5-year industry total returns. Are the returns consistent with what you know about firm life cycles? To what extent do they reflect the general state of the economy during each period?
- On the Industry tab of Market Insight, select the Publishing industry. Open the most recent S&P Industry Survey for Publishing, and then answer the following questions.
- What industries contribute the most advertising revenue to the publishing industry? How would the outlooks for these industries affect the performance of publishing companies?
- Look for the “Industry Trends” section of the report. What trends are noted? How might you expect these trends to affect the publishing industry's performance in the short term?
- Is this industry labor intensive? What demographic trends can you think of that might be important in this regard?
- Find the “Key Industry Statistics and Ratios” section of the report. Choose two of the features reported in this section and discuss how you think they will affect the industry.
- What suggestions does the Survey have for evaluating the financial health and the prospects of a firm that specializes in magazines?
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