Reference no: EM133832399
Competencies
Determine the financial position of a firm by analyzing financial statements.
Analyze financial ethics of a firm.
Recommend a corporate finance strategy to enhance the value of a firm.
Appraise a firm's investments to maximize returns and minimize risk.
Determine the financial sustainability of a firm based on a trend analysis.
Evaluate financial risk, cost of capital, and risk-reward tradeoffs. Get expert help with your assignments!
Student Success Criteria
View the grading rubric for this deliverable by selecting the "This item is graded with a rubric" link, which is located in the Details & Information pane.
Deliverable Preparation
During this course, students will conduct research on companies of their choosing, guided by the scenarios outlined in the deliverables. There are no pre-assigned firms for research purposes. Instead, students are encouraged to select companies that are relevant to the deliverable content. The information gathered about these firms should reflect real-time data and demonstrate real-life applications in alignment with the course material.
Scenario
Your firm is contemplating merging with one of its suppliers, requiring approval for a vertical merger. To aid in the decision-making process, you have been tasked with creating a presentation for the management and financial teams. While potentially advantageous, vertical mergers necessitate caution as they empower firms to eliminate intermediaries. Your objective is to prepare a business plan that thoroughly examines the pros and cons associated with this specific vertical merger.
Given that your firm engages with suppliers domestically and abroad, the analysis must discern which type of merger - whether domestic or international - would best align with and facilitate achieving its highest financial goals. The determination will serve as a strategic guide in assessing this significant investment decision's feasibility and potential outcomes.
Instructions
Develop a comprehensive business plan for the vertical merger of your firm with either a domestic or foreign counterpart, addressing the following key elements:
Financial Position Analysis:
Include an analysis of each company's financial position by scrutinizing their respective financial statements.
Note: The analysis centers on three financial statements from your selected companies, comparing them year-over-year for a period of five years.
Financial Ethics Plan:
Propose a financial ethics plan tailored for the newly merged entity, ensuring ethical practices and standards are upheld.
New Financial Strategy:
Detail a novel financial strategy to enhance the merged entity's financial performance and competitiveness.
Investment Analysis and Recommendations:
Analyze tangible and intangible investments resulting from the merger, recommending strategies to optimize returns and minimize risks.