Questions
Select two public companies which have been in a takeover or merger transaction in
recent years.

Question 1. Ratio analysis (30 marks)
Analyze the financial statements of these two companies in the year prior to the transaction, and
the consolidated financial statements 1 year and 3 years after consolidation using:
(a) Calculation of ratios:
(i) 3 Profitability and solvency (liquidity) ratios.
(ii) 2 Efficiency ratios
(iii) 3 Shareholder ratios
(iv) 3 Capital structure ratio

(b) Critically interpret and discuss the ratios in point (i) to (iv) above 1 year before and 3 years
after the takeover and merger transactions. Besides your qualitative explanations, use
figures, tables and graphs to present your data.

(c) Compare the ratios of consolidated financial statements with two of the main competitors
of the firm within the same industry and also with those of the industry.

(d) Would you invest in the company after the transaction? Why or why not? How does the
company compare to its competitors and the industry? Justify your answer by writing a
short recommendation to a potential investor. Structure your answer properly