Economics Homework Help

Prior to beginning work on this assignment, read  Financial Statement Analysis in Mergers and Acquisitions (Links to an external site.) online resource. Carefully review the Company Profile and Due Diligence Guidelines document. You will support your findings and recommendations with evidence from at least four scholarly and/or professional sources in addition to the required annual reports for your chosen acquiring and target companies. Be sure to include any links to professional websites used as references or to access company information.

In this assignment, you will prepare a financial analysis for a merger or acquisition based on the acquiring and target companies you identified in the Week 2 assignment. This analysis will include items 3, 5-8, and 10 from the Company Profile and Due Diligence Guidelines document.(See Attached Document)

The completed report must include the following elements:

• Analyze business valuation techniques, and compute, summarize, and identify trends for the following financial ratios for the target company:
  • Inventory turnover for the past three years
  • Price to book value for the past three years
  • Price to earnings for the past three years
  • Sales to accounts receivable for the past three years
  • Sales to inventories for the past three years
  • Sales to fixed assets for the past three years
  • Earnings to book value for the past three years
• Create sales profiles for both the acquiring and target companies, including the following:
  • Description of the market
  • Gross and net sales for the past three years
  • Comparative advantages and disadvantages
  • New developments and industry trends
  • Research program, cost history, and scope results
  • Analyze the earnings and dividends for both companies, including the following:
  • Earnings records for the last three years
  • Earnings comparisons with the industry for the past three years
  • Dividends and earnings records for the past three years in total and per share
  • Potential economies
  • Analyses of selling and general administrative expenses
  • Evaluate the short-term and long-term assets for both the acquiring and target companies, including the following:
• Relationships of cash to current liabilities
• Pricing methods
• Accounting methods and procedures
• Analyses of investments
• Evaluate the short-term and long-term liabilities for both the acquiring and target companies, including the following:
  • Long-term loans outstanding and terms
  • Dividend and interest arrearages
  • Contingent liabilities: warranties, patent infringements, loss contracts, and compensation for services
  • Pensions
  • Commitments for new buildings, machinery, and inventories
• Evaluate three-year projected financial data for the target company, including the following:
  • Assumptions for the projected pro forma financial statements
  • Projected earnings forecast, including income statements and statement of cash flows