Reference no: EM13837534

Begin with the Balance Sheet: Respond to each question in the order listed:

1. Start with the Capital Accounts. How do they differ? How are they the same? Are they realistically presented? What are the Book Values, and what are the present Ratio of the stock Prices to Book Value.

2. Now look at the Fixed Assets (the Property Account). When you read Chapter Five of the little Graham book you will realize that assets are not always what they appear to be. Do either of your companies show as Assets items that need explanation? What are they? How are they explained? You might have to go into the footnotes to the Financial Statement to find the answers.

3. Are the Non Current Assets substantial and how are they explained? Are three substantial Intangible Assets? What would be substantial for companies as large as the ones you are working with?

4. Do your companies have Deferred Tax Accounts? How are they treating taxes?

5. Now let's look at the Current Assets. Are the companies maintaining adequate liquidity? Mr. Moovon is going to want to see the relevant ratios, so you had better calculate them and have them ready.

6. Liabilities. Does either company have too much debt? If so, CB&M won't touch them. Can either company carry significantly more debt? How much more? CB&M always loads the companies it acquires with as much debt as they can carry. That's how they finance the deal.

7. Are there any hidden assets? This calls for very careful analysis.