Illustrate what do you think the purchase price

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Reference no: EM1396256

Q. You are assigned to lead an acquisition team designed to introduce diversity into your corporation's product portfolio. Your core business is a major food distributor. The industry you are considering acquiring was founded six years ago also is a small privately held technology industry with a modest, essentially single product entry into an emerging technology. Though there may be some compatibility among your core business also which of the acquired organization, the nexus is not clearly developed also probably at least five years away.

Sales have risen at an average of 20% a year.

Return on sales has averaged 26% for the past three years, after three years of looses.

Earnings have averaged 1,200,000 since the industry was founded.

The Industry's current ratio is 2.6 to 1 ; the industry standard is not clearly established.

The organizations net worth is just over 2,000,000

As you study this acquisition, identify also comment on the critical, strategic factors also questions you would want to explore in an attempt to ensure a successful acquisition.

b. Are you fully satisfied with the company's ability to generate sufficient working capital Explain why?

c. Illustrate what do you think the purchase price should be if you were to acquire the organization? Document Explain why you arrived at which valuation.

Reference no: EM1396256

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