Assessment 2: Financial ratio analysis BAO5734

Assessment 2: Financial ratio analysis

Instructions

Overview

Length: 2000 words (+/- 10%)

Weight:40%

Due date: End of Week 3 (11.59pm Sunday)

In Assessment 1, you were requested by the CEO of XYZ Mutual Fund to review and provide a brief on Baby Bunting's financial position. Based on your analysis, you had recommended to John Smith that Baby Bunting was in a strong financial position, and to invest as a major shareholder into the company.

XYZ Mutual Fund has now successfully established themselves in Australia by being the major shareholder of Baby Bunting Ltd and the investment is performing well. Due to the positive outlook in this industry, John Smith is recommending the Board of Baby Bunting to consider buying G8 Education Ltd (i.e. in childcare) as part of a horizontal expansion strategy.

John has asked you to provide a feasibility report for the board on the possible Merger and Acquisition project between Baby Bunting Ltd and G8 Education Ltd.

In this assessment, you are required to conduct financial analysis on the Baby Bunting2022 Annual Report(Baby Bunting Group Limited, 2022) and G8 Education's2021 Annual Report(G8 Education, 2022).

Note:

• Baby Bunting 2022 Annual Report July 2021 to June 2022


• G8 Education 2021 Annual Report January 2021 to December 2021

This assessment supports unit learning outcomes 2, 3 and 4.

Your assessment submission should include a cover page. Download theCover page template (DOCX 13 KB).

Task

Your feasibility report should address the following:

1. Use theBAO5734 financial template (XLSX 26.9KB), and calculate thefirms' financial performance using profitability, leverage (equity or debt), and liquidity ratios. (equivalent to 500 words)


2. Compare the financial analytical results of the two companies and justify why a merger is timely. (500 words)


3. Articulate the strengths and weaknesses, using Porter's Five Forces model and SWOT Analysis of the merger and acquisition project using the Consolidated Financial Results (Balance Sheet, Profit and Loss and Cashflow) of Baby Bunting Pty Ltd and G8 Education. (500 words)


4. Evaluate the elements that shape the merger's value creation and assess its potential to maximise its triple-bottom-line performance (Refer to the sustainability sections of the annual reports). (500 words)

Supporting resources

APA referencing: Home(Victoria University Library, 2022).

BAO5734 Assessment 2: Financial template guide (2023):