PART A

You have been approached by the strategy team in your company. They are considering the acquisition of one of two companies, each of which are deemed to be a good strategic fit for the company. You have been asked to review the financial performance of each company over the last six years (let’s call them ‘Target A’ and ‘Target B’) and provide a narrative on their performance that could be presented to the Board of Directors. The strategy team acknowledge that while the future trajectory of these companies matters more than their past performance, your commentary will help them understand the journey these companies have traversed and if it would be appropriate to keep the current leadership/management team of these companies in place post-acquisition.

Required

Drawing on whatever analytical tools and measures you deem appropriate, provide a narrative on each company in terms of its financial performance over the measurement period. As a guide, you should consider the following:

• The overall financial performance of the company over the period.

• The actions management appear to have taken in certain periods and the extent to which these actions appear to have been successful.

• Any other factors you deem relevant. 

Based on your analysis, provide a recommendation for the strategy team on which company you feel has performed the strongest over the period, noting the different business models that the financials may appear to reflect.   

Note the strategy team do not want you to know the name of the companies to conduct this exercise, nor do you need to identify them. The aim is to demonstrate your ability to analyse and interpret the financial reports of a company and ‘tell their story’ in a meaningful way.

The financial reports for Target A and Target B are presented HERE.