The Impact of Merger on Shareholders' Wealth Assignment

Assignment Task

Select a major merger/acquisition that occurred between 3 to 5 years ago (major is defined as an acquisition price tag over $1 Billion).

• Identify Management's justifications for the acquisition (synergies, projections, assumptions, etc.).
• Discuss whether those assumptions materialized in the years following the acquisition.
• Was the acquisition successful?
• How did Management "spin" the post-acquisition impact results?
• Write a paper fully describing this merger/acquisition. This assignment is due on the sixth week of class.
• Class presentation of your findings to the class.
• Summarize your findings in PowerPoint, outline, graphs, etc.

Annual Report Project

This project consists of analyzing a U.S. company and an international competitor. The international competitor must use a foreign country GAAP or International Financial Reporting Standards (IFRS), not U.S. GAAP. The companies cannot be duplicated in the class.

1. Who are the companies and what are their purposes?

2. What country is the background for the international competitor?

3. What currency does the international competitor use?

4. Is the international competitor using foreign GAAP or IFRS?

5. Do both companies include letters to the stockholders from the executives? If so, discuss a total of three similarities/differences between the letters.

6. Go to the Management’s Discussion and Analysis section for both companies. Discuss a total of five similarities/differences between the sections.

7. Go to the auditors’ report for both companies. Explain all differences between the reports. Who is the auditor of each?

8. Go to the income statement for both companies. Discuss a total of three similarities and differences.

9. Go to the balance sheet for both companies. Discuss a total of three similarities and differences.

10. Go to the statement of cash flows. Explain all differences between the statements.

11. Go to the notes to the financial statements. Discuss a total of ten similarities/differences between the sections.

12. In your opinion, which annual report is better for stockholders? Briefly explain.

13. For both companies, prepare vertical and horizontal results of the income statement and balance sheet for the two most recent years. Comment on the results.

14. For both companies, calculate the following ratios for the most recent year ONLY and discuss the results (other ratios may be substituted if the following are not meaningful):

a. Current ratio

b. Quick ratio

c. Inventory turnover

d. Return on Equity

e. Return on Ass

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