Students may select a recent (2018- present only) mergers and acquisitions. You may get this information by glancing over financial media such as Wall Street Journal, Baron’s, and Business Week. There are several online resources also available. For example, you may look at company financial statements such as SEC Edgar Site on internet: (http://www.sec.gov/edgarhp.htm) or (http://edgar.stern.nyu.edu).
After selecting those business combinations, you should acquire the annual reports of those firms. You may also conduct a brief research through business periodicals or through internet looking for stories surrounding those business combinations. You are expected to study thoroughly those annual reports and articles and pay attention to those materials that you have studied in this course.
The materials are expected to be covered in your project may include but not limited to the following subjects:
- Direction of business combination (vertical, parallel, or conglomerate).
- Major reason(s) for merger and acquisition.
- Was the merger tender offer or hostile takeover?
- Process of negotiation and legal steps took place for the M&A.
- Method of business valuation
- Acquisition method of business combination.
- The amount of intangible assets and goodwill recognized.
- Accounting treatment and implementation of IFRS if any.
- Effect of business combination on key financial ratios by computing at least the following ratios:
- Liquidity (current ratio, quick ratio, current cash debt coverage ratio, receivable turnover, inventory turnover, etc.);
- Solvency (debt-to-asset ratio, cash debt coverage ratio, etc.); and
- Profitability (profit margin, cash return on sales ratio, asset turnover, return on assets, return on common equity, earnings per share, price earnings ratio, payout ratio, etc.)
- You must also use other analyses techniques (horizontal and vertical) to explain the effects of merger and acquisition (M&A) on financial statement.
· Your comments regarding to this merger and acquisition (business combination.)
· Your comment to investor and creditors to help them in decision-making.
Please Note: Whatever M&A you select your coverage of analysis should continue to the present (2020) as much as the financial information is available.