HSA525 Strayer Assessing Financial Performance and Merger Acquisition Paper

User Generated

grracertanaplerfbhepr

Business Finance

HSA525

Strayer University

Description

Develop a financial plan for the next three years. Use the financial statements from your selected health care organizations that were the focus of the SWOT Analysis assignment and that you have been following in the e-activities throughout the quarter. Using the Annual Reports of both organizations, consider the financial ratio that analysts would use to evaluate the financial condition of each company. Speculate on the organizations’ ability to merge with their competitors.

Write a six- to eight-page paper in which you:   1. Use your ratio analysis to determine whether the profitability trends are favorable or unfavorable and explain your rationale.   2. Suggest the key financial drivers that most likely will cause your health care organizations to merge. Provide support for your rationale.    3. Assume that your organizations have merged. Determine the evaluation criteria that a financial analyst would use to evaluate the financial performance of the organization postmerger. Identify the determinants that the analyst would use to decide whether the merger generated favorable financial results for the organizations. Provide support for your evaluation.    4. Predict the financial stability of the health care industry over the next three years. Provide support for your prediction.    5. Use at least three quality, current (no more than four years old) academic resources. (Note: Wikipedia and other websites do not qualify as academic resources. Scholarly resources include national health professional journals, governmental websites, and corporate organizations.)    Your assignment must follow these formatting requirements:    Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.    Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Running Head: ASSESSING FINANCIAL PERFORMANCE AND MERGER IMPACTS
1

Assessing Financial Performance and Merger Acquisition Impacts
Name
Institutional Affiliation
Professor
Date

ASSESSING FINANCIAL PERFORMANCE AND MERGER IMPACTS

2

3M is a worldwide technology company that majors in Electronic and Energy, Health
Care, Safety and Graphics, Industrial, and Consumer. The 3M with a sign of MMM is among the
leading manufacturer in the marketplaces where it serves. The reputable company's products spin
around notable expert in product manufacturing, development and marketing, and the company
is subject to tight competition from the technology companies in the industry.
The company is doing quite well in the market. One of the ratio analysis used to
determine the profitability trend of a company is the price to earnings ratio (P/E), which is
arrived at by dividing the price per share by earning per share. According to the 3M 2018 annual
report, the P/E of the 3M company within the twelve months of 2018 is at 25.98%. This is
arrived at by dividing the price per share ($198.37) by earning per share ($7.64). This higher P/E
ratio implies that the investors are paying hugely for the earning of the company. In brief, the
investors have to pay significantly for one dollar of the company's earning. However, this is not
bad or good, but it implies that the company has a higher expectation in terms of what it can
achieve in the future. Like the 3M has a greater market value in the market, its products are
selling out fast and it is famous in the marketplace.
Usually, when the earnings per share drop, the 'E' reduces, and this means as much as the
stock may appear cheap now, in the future, it will be higher (Virmani & Hussain, 2018). A
higher P/E suggests that the price of the stock is more elevated and thus encourage the
shareholders to sell more. The earning EPS of the 3M company fell by 17% in the last twelve
months. However, in the previous five consecutive years, the EPS have shown a steady rise of

ASSESSING FINANCIAL PERFORMANCE AND MERGER IMPACTS

3

2.9%. Thus driving to a reduction in the earning per share by 1.2%, and this might mean a low
P/E driving to low expectations.
Furthermore, the average P/E for other companies in the same industry is 26%, which is
almost similar to that of 3M. Thus, the performance of 3M is expected to be similar to those in
the other companies, but in case the company performs better, then it is a gain on its side. The
performance, profit,...


Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags