HC Financial Analysis for the Merger and Acquisition Valuation Plan Discussion

User Generated

zekgen09

Economics

Howard College

Description

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


Unformatted Attachment Preview

Company Profile and Due Diligence Guidelines This resource will provide guiding information that will assist you in the creation of the assignments within the course. Please refer to this guide as you are completing the various sections of your assignments. As you are gathering information you will need to research and investigate your selected acquiring company and selected target company backgrounds. This will include researching annual reports, as well and other related industry reports for up to the past three years. General Information 1. Exact Corporate names of the Acquiring and Target Companies 2. Brief history of the Acquiring and Target Companies 3. Description of the products or services 4. Date and state of incorporation and States in which the company is qualified to do business Financial Information 1. Summary of the Acquiring Company and Target Company financial statements for the last three years, highlighting the strengths and weaknesses (financial analysis) 2. Summary of the Acquiring Company and Target Company working capital position for the last three years and normal requirements based on trade practices. 3. Compute, summarize, identify trends for the following financial ratios: • 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 4. Tax Due Diligence • Recommendations and explanations of several tax due diligence models (valuation) or strategies that could be used: including consequences and any necessary mitigations. 5. Sales • Description of market • Gross and net sales for the past three years • Comparative advantages and disadvantages • New developments and industry trends • Research program, cost history, scope results 6. Earnings and Dividends • Earnings record and budget for last three years • Earnings comparison with the industry for the past three years. • Dividend and earning record for the past three years in total and per share • Potential economies • Analysis of selling and general administrative expenses 7. Assets • Relationship of cash to current liabilities • Pricing method • Accounting methods and procedures • Analysis of investments 8. Liabilities • Long-term loans outstanding and terms • Dividend and interest arrearages • Contingent liabilities: warranties, patent infringements, loss contracts. compensation for services • Pensions • Commitments for new buildings, machinery, inventories 9. Terms of Acquisition • Reason for sale (Are we to acquire or be acquired and how do we posture ourselves accordingly?) What are the reasons for merging? • Price to Paid • Terms of payment • Financing • Brokerage fees • Tax considerations. 10. Projected financial Data • Assumptions for the projected pro forma financial statements • Projected earnings forecast: income statements and statement of cash flows (three year projections)
Purchase answer to see full attachment
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

View attached explanation and answer. Let me know if you have any questions.

1

Financial Analysis for the Merger and Acquisition Valuation Plan.

Student Name
Institution Affiliation
Financial Analysis for the Merger and Acquisition.
Instructors Name
Due Date

2
Financial Analysis for the Merger and Acquisition Valuation Plan.
General Information.
AT&T Incorporation, the purchasing corporation, is a US-based international holding
company. It is undoubtedly the world's leading telecommunications company and the largest
provider of cellular phone systems in the United States. The target company, on the contrary, is
Time Warner Cable, which has now been established as Spectrum, and the firm's parent group is
Charter Communications. As a direct consequence, the title Time Warner Cable would seem to
prevail only to the extent that Spectrum can make a distinction of the firm and former customers
can refer to it.
AT&T History.
AT&T attributes its registered trademark to Alexander Graham Bell, the man who
invented of the telephone. In 1984, the defunct AT&T agreed to sell its broadband
communication business operations while maintaining its long distances, R&D, and production
facilities. As a result, SBC Communication Systems Incorporation (earlier founded as
Southwestern Bell Corporation) was established. The Telecommunications Act of 1996, which
was passed twelve years later, caused considerable challenges of the changing surroundings.
SBC expanded its presence in the United States through a sequence of merger and acquisitions,
including Pacific Infotech Group in 1997 and Ameritech Corp. in 1999. In 2005, SBC acquired
AT&T Corp, establishing the new AT&T, a telecommunication service trailblazer for businesses.
The most substantial source of frustration for AT&T has always been its finance sector
organizational size (Lamphier & Welch, 2019). The company appears to have continuously made
significant contribution to the development of customer acquisition. The corporation's emphasis
has changed ever since. The establishment of the internet and mobile phones forever altered the

3
competition. Throughout the last decade and a half, the redesigned AT&T has made a number of
mergers, which include Cingular Wireless, BellSouth, Cricket, and, eventually, DirecTV. The
worth of its most recent acquisition has already been challenged. AT&T is a major player in the
mainstream press in the modern era, with business units in traditional phone, internet access, and
commercial television.
Time Warner History.
Warner Media, formerly known as Time Warner Incorporation and later AOL Time
Warner, is among the world's most powerful news & entertainment conglomerates. Having
followed Time Warner's merger of Warner Communications and Time Incorporation in 1990, it
was later renamed, and since becoming an AT&T conglomerate in 2018, it was renamed Warner
Media. Home Box Office Incorporated (HBO), Warner Brothers, Turner Broadcasting System
Incorporated, and Warner Brothers Pictures Incorporated are the three major divisions. Its
primary products are films, as well as broadcast and cable entertainment content and distribution.
Warner Brothers Pictures, Incorporated, the first production house, was established in Los
Angeles in 1923. AT&T announced in 2016 that it would spend approximately $85 billion for
Time Warner. Despite this, the exchange required federal regulatory review, and the Uni...


Anonymous
Excellent! Definitely coming back for more study materials.

Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Related Tags