You work as a Financial Analyst for a firm of international management consultants

You work as a Financial Analyst for a firm of international management consultants. A very large multinational company has approached your firm for advice. The client is considering diversification through an acquisition strategy. As part of your assignment you should name this company (acquirer firm).

Select two companies in the same industry which must be Public Companies listed in a globally recognized stock exchange. You need to discuss key financial and acquisition aspects of the two selected potential acquisition targets in relation to the tasks shown below;

Task-1

Undertake the necessary research and write a report to the client which:

1. Critically evaluates and compares the financial performance and financial position of the two potential target companies using the published financial statements within the last three years. You should analyse the financial performance and financial position of these firms through the use of financial ratios (the detailed computations of the financial ratios should be provided in the appendix of the assignment). (Suggested word count 1100 words)

Task-2

The client is particularly concerned with one key aspect of these potential target companies, namely the management of working capital.

1. Critically analyse the importance of working capital management (suggested word count 300 words)

1. Compare the working capital management of both firms over the last three years. (Suggested word count 400 words)

Task- 3

1. Your report should conclude with a reasoned argument as to which company – if either – might be the preferred acquisition target in terms of financials. (Suggested word count 300 words)

1. Non-financial factors, in particular how the target acquisition fits in with the current strategy of your acquirer firm. (Suggested word count 400 words)