Topic 19

Hi, I have chosen topic 19 but I have a few questions/ clarifications and I would really appreciate your help.

For premerger analysis I plan to do a swot and financial analysis. can I focus the premerger analysis on the acquired company as I have not been able to get the acquirers financial statementsfor the years before the merger as the company was private before the merger and did not publish its financial statements.Reading through your replies to questions from other students you suggested that the swot should tie in with your financial analysis and ultimately help you meet your research objectives. one of my objectives was to determine why the acquirer acquired the target company but if I cannot perform premerger analysis on the acquiring company how do I meet that objective?

In addition to the swot and financial analysis I am considering doing either Johnson and scholes SFA model or Force field analysis. Can you tell me which of the two will be more appropriate. Will using only two business models make a good RAP?

With regards to operational consequences apart from reduction of head count and closing of less efficient facilities I’m not sure what else to add and I doubt that will be enough.Will you consider different management styles as a “culture” issue?

Thanks for the help

@traphena thanks for the feed back .i just want to give u a complete overview ofwhat I plan to do or have done so far as I feel that I did not explain myself well in my previous post.

I have done a full swot on both companies with which I plan to demonstrate suitability(from SFA model) of the decision. I mean that I have pointed out how one company’s strength can be used to overcome the others weakness or explore its opportunity.i also plan to use financial analysis to back the swot and sfa e.g. One of the strength of the acquired was high cash reserves(from cash flow statement) so this can be used to back an opportunity of doing more acquisitions on the swot and also feasibility (available resources) on the sfa
For “acceptability ” from sfa I plan to use mendelows matrix on stakeholders and analyze each category

I have written a section on the back ground of the merger where I explored the strategic reasons for the merger.two e.g. Are as follows:
1. Management expected synergies such as cost savings of 1.5 billion annually
2. The acquiring company planned to use its international presence to sell the targets company’s products

To analyze whether this was achieved i will take individual total cost for each company add them to get combined pre acquisition cost and then compare to the new company’s total expenses to see if the 1.5 expected savings was achieved.

I was able to get only 2015 financials for the acquiring company but that will give me two years results as it includes 2014 results but I will explain this as a limitation and why I only did pre merger financial analysis for only two years.

An issue I have is that I got the post merger annual reports from the security and exchange commission website submitted through form 10k which are supposed to be audited but it does not include an audit opinion so I’m not sure if it is audited or not.can I go ahead and use it?

For the international sales I plan to use the acquirers financials (segment reports)to see if the percentage of sales oversees has increased or decreased compared to premerger.

For operational results as I said in my previous email there have been some redundancies and closing of facilities.this I plan to analyze using the financials coz it has no of processing facilities and workers.i also have backings for this through analyst reports and news articles.
For culture the only thing I could think about is that the acquired company has a very hard approach to cost cutting and for e.g. There executives even fly coach so I was thinking this will affect the acquired company’s staff. They also implemented zero based budgeting which is new to the acquired company.

In summary I plan to use three models swot,sfa and mm plus financial ratios.
do you still think I’m not on the right track ? Have I completely misunderstood what I’m supposed to do?

please let me know what you think. i have done a lot of work and if I change topic I don’t think I will be able to submit in may with all my other commitments.

Thanks for the help

@imaan From your first post it looked as if you hadn’t got much pre-merger information. However from what you have said subsequently it does sound as it you have acquired sufficient data and information for you to be able to do some original analysis of your own and produce a project that potentially would fulfil the assessment criteria and RAP requirements.

In fact you seem have a good understanding and grasped what is required with your plan to demonstrate strengths/ opportunity from the SWOT Outline the reasons for the merger/acquisition and identify the strategies and then go on to do analyse the subsequent position

The cost information and pre-merger sales information would be very useful for your analyais(do you have both companies figures for sales?). This and profit, gearing and share information would then allow you to make comparisons with the post merger situation as that in turn will help you form an opinion, backed up by evidence, of whether the merger / acquisition has been successful.

There is no problem using several models as long as they are ‘adding value’ in helping you build up a strong evaluation (sometimes students just put in lots of models that are not really making a valid contribution to advancing the analysis and end up being just a waste of words). Overall however you seem to be putting together a well thought through project and as long as you reference adequately and keep within the word count there is a good chance it will get a decent grade – so well done so far!

i have really found this forum helpful, i’m not clear on the requirement to base my project on recent organisational activity or processes rather than historical events. i want to do topic 19 and i’m intending to submit in November 2018, however the merger started in 2015 and the completed in mid 2016. Both companies reported separate financial statements for 2015. i have a good information of both pre-acquisition and post acquisition for both companies but before i proceed i want to know if this meets the recent activity.

Apologies for the delay in responding – I have been away fir a couple of weeks.

You can turn everything into ratios using the figures from the reports you have as ratios obviate the need to do adjustments. Make it as simple and easy for yourself – by using ratios you should then be able to do line graphs from them giving you trend lines

Yes I see the problem here as with asset turnover you are using P&L figures for 34 weeks and 52 weeks over the same balance sheet denominator. So no ratios won’t work in this scenario (however they would where you are using a denominator that similarly relates to P &L 34 weeks e.g. GP or NP.

Your only alternative is to priorate the P&L figures to turn them into 52 weeks if you really want to use balance sheet numbers as part of the ratio calculations.

Comments have be interpreted in the context given. Continuous trends would normally be appropriate for Topic 8 as business strategic decisions may affect more than one year. Mergers and acquisitions are extreme strategic decisions and in Topic 19 it is the effect of these specific decisions you need to evaluate. The consequences of a merger/ acquisition will impact on many areas of the business not just financial performance so the analysis needs to be as ‘holistic’ as possible.

I am not so sure how relevant comparing 2013 with 2012 is for a company being studied in 2018 so ask yourself (a) is this section adding value? Or (b) am I just including it because I am following a routine approach? Obviously if (b) chop it out.

I think the post merger years are quite important as they help you to assess the success / issues / highlights and / or failure of the merger / acquisition whereas the pre-merger years merely indicate what may have led to the decision.

As always it Is original analysis and critical thought that will drive your grade.

You can always show the trendline for several years pre merger but don’t waste too many words other than state the case for the decision and the main factors behind it.

Also do I need to follow the structure in the info pack?to save on word count I did not do research questions even tho I have research objectives.
Because I needed more words for the analysis section I did half of the recommended words for section 1 and 2.would I be penalised for this?
Thanks again

Thanks very much for all d help.i will try to do a few research questions and also read through to ensure I’ve not made any of the mistakes u have highlighted.

Analysis and evaluation is the critical part of your report so you should ensure you reserve about 5,000 words for it. Wherever possible use graphs to illustrate trends, putting detailed calculations, tables and financial statements in the appendices.

Headings and sub-headings and a good structure will help you put your findings in a logical order. It is important that you do some original analysis of your own and not just describe what went on by analysing some key ratios and discussing implications and assessing whether the merger strategy was successful. As for depth – how long is a piece of string? As much as you can within the word count…..

Without seeing your work and the full marker feedback I can only comment generally. Evaluation, analysis and conclusions is the most frequently failed section followed by information gathering and referencing. Often this is because students describe what went on rather than discuss the implications, significance and effects of what has happened.

The other common error is to drown the marker in a ‘sea of numbers’. ( I always wished students would ask a friend or family member to read their work and ask the person if they struggled to make sense of it -honest opinion required -and thereby save themselves both the disappointment of failing and wasting GBP 340 on the submission fee). Believe me it is impossible to absorb masses of numbers at one sitting and often there is no point having them in the text when a graph will show the position as this can be assimilated far more easily than words (probably an evolutionary fact that visual information enters the brain much quicker because written language is comparatively a recent development)

However from your brief feedback comments it appears that you have not committed the above cardinal sins but simply made many statements that were unsupported by references and/or used an inadequate range of information sources. To remedy the former I suggest reading the Open Tuition Ultimate Guide to Referencing your RAP, which I helped to write, (on the OT OBU homepage). The idea was to break referencing down into simple rules that explain the logic. You should also try to find a few more sources to support your work (possibly the special search engine Google Scholar might help there).

Bad luck with the fail for (5) communication- this is a rarity but I suppose the argument is that it is supposed to be a semi-professional report and these days with grammar and spell check such mistakes are preventable – but anyway simple for you to remedy 🙂

To answer your specific questions:
1. No SLS or slides required for the resubmission but everything else is
2. You may resubmit using the same company – the rule you cite is for the first submission

Good luck with your work!
Gillian

That explains the fail for communication then -yes you more than likely exceeded the word count and I know some markers are very ‘hot’ on this. I remind my own mentees to ensure that they take account of the words in graphs and diagrams. EVEN IF the MS Word count is below 7,500 (I suggest never going above 7,400 to deal with this issue).

Another thing I always do is tell my mentees to trim out excess words in Parts 1 & 2 as the Findings, Analysis andEvaluation section is the one that will mainly dictate whether you pass or fail and the ultimate grade (for a first time submission)

You may try emailing acca@brookes.ac.uk and politely request your feedback. Although the submission portal is down I understand from my contacts that some parts of the system are available to staff. If they have the time I am sure they will try to help you with this if you provide your full name, reg. No and inform them it was P35 and are using your registered email address. (Obviously for security and GDPR reasons they may need to ask security questions in addition) No promises but alternatively if you can mail me via my website i may be able to assist with this (a case of who I know!)

Note to others – unfortunately this is not a general invitation to the ‘world and his wife’ but specifically directed to meonline911

Hi all,

Just a quick question and your contribution towards this would much appreciated.

Do still need to have mentor when re-submitting updated research report (RR)?

I am a bit confused about the requirement regarding this because i have passed SLS in my previous submission.

Thanks.