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Running head: PROBLEM SOLUTION: LESTER ELECTRONICS
Problem Solution: Lester Electronics
Mergers and acquisitions are a big part of the corporate finance
world. Every day, companies come together to make larger ones. "A
true merger in the legal sense occurs when both businesses dissolve
and fold their assets and liabilities into a newly created third
entity. This entails the creation of a new corporation." (I Why a
merger) In order for a merger to be successful companies must
integrate financial planning into the process.
Financial management is a vital part of managing operations. The
basic elements of financial planning consist of investment
opportunities a company elects to take advantage of, the amount of
risk the company chooses to take, and the amount of cash the company
believes is necessary to pay shareholders. Financial planning is a
critical activity for every business regardless of the company size
or length of time the company has been in business. Without financial
projections integrated into business planning process it is virtually
impossible for any company or organization to experience business
growth. Organizations utilize financial to assess possible funding
requirements and also to determine financial consequences of
alternative funding, marketing or operational strategies. If applied
correctly a financial model can avoid planning mistake, identify or
opportunities, provide guidance and development options.
This paper presents the issues with mergers and acquisitions and
discusses the methods to make merger more successful in an attempt to
determine if they are helpful or harmful to the companies, their
shareholders, and the economy as a whole.
Situation Analysis
Issue and Opportunity Identification
...
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