BAO5734 Financial Analysis
Task
Assessment 2: Financial ratio analysis Hide Folder Information Instructions
Overview Length: 2000 words
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 Bunting 2021 Annual Report (Baby Bunting Group Limited 2021) and G8 Education's 2020 Annual Report (G8 Education 2020).
Note: Baby Bunting 2021 Annual Report – July 2020 to June 2021 G8 Education 2020 Annual Report – January 2020 to December 2020 This assessment supports unit learning outcomes 2, 3 and 4. Your assessment submission should include a cover page. Download the Cover page template (DOCX 12 KB).
Task Your feasibility report should address the following:
1. Use the BAO5734 financial template (XLSX 32.76KB), and calculate the firms' financial performance using profitability, leverage (equity or debt), and liquidity ratios. (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)
5. Supporting resources Harvard referencing: Home (Victoria University Library 2019) has a variety of Harvard referencing resources that you can use.
