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

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.

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.
• Financial Risk Assessment:
• Evaluate financial risk, capital cost, and any tradeoffs with the new merger, providing insights into potential challenges.
• Conclusion on Pros and Cons:
• Conclude the business plan with a comprehensive overview of the pros and cons associated with the proposed vertical merger.

A – 4 – Mastery

Thorough and accurate analysis of the financial statements and financial position of the company.

A – 4 – Mastery

Thorough and accurate collated financial ethics plan for the new merger.

A – 4 – Mastery

Thorough financial strategy to enhance overall financial performance and competitiveness

A – 4 – Mastery

Thorough and accurate analysis of joined tangible and intangible investments recommends exemplary strategies to maximize returns and minimize risks.

A – 4 – Mastery

Thorough and accurate evaluation of financial risk, cost of capital, and any risk tradeoffs with the new merger.

A – 4 – Mastery

Thorough overview of the pros and cons associated with the vertical merger.

A – 4 – Mastery

The document demonstrated exemplary attribution using credible scholarly sources in APA format and had no spelling and grammar errors that interfered with clarity.