TAsk - Comparative Firm Level Financial Analysis and M&A Evaluation Length: 2,000 words total (+/- 10%). Harvard Reference list Weighting: 30% of total unit marks Things to be considered :- • Overall structure of the report to the Board • Communication of concepts and terms to a professionally qualified and experienced persons • Evidence of wide research to support your analysis • Development of concise recommendations for the Board • Evidence of sound reasoning and judgement to support your recommendations TASK you are the CFO of the company operating in the industry sector previously selected in Task 1. Based on the financial market analysis and country risk assessment for the countries selected previously. you are now required to perform a firm level analysis of companies operating in your industrial sector in each of the three financial markets analysed in Task 1. In this assignment you are limited to two comparator firms listed on the financial markets in each of the three countries (that is, a total of six firms). Required: Prepare a financial diagnostic report for the Board comparing and analysing the financial structure of the six selected companies and make a recommendation to the board on the best possible financial structure for a new company entering this industrial sector in your preferred Asian financial market, including the potential for any mergers or acquisitions. Your financial diagnostic report to the Board should consider, among other things, the following matters: • Regulatory framework barriers to entry and competition policy issues • Consideration of M&A opportunities for each of these prospective target companies • Firm specific comparative financial statement analysis • Firm specific vertical analysis, including the supply chain implications of the financial structure of the companies • Other matters required for a thorough due diligence report • Recommendations relating to each potential target company You must talk aabout - 3 countirs - 6 companies - 2 compnies (first two biggest competitors) for each country (financial vertcal, horizontal analysis for every company). Use % rathr than $ all the 6 companies - taking over target , financial ststement Best possible financial structures 1. Is it all equity and no debt (long term interest bearing) (unleaverged firm) non of this the firm has Examoles of Long term debt , bonds, term bank loans, capital leases, preference shares 2. Mix of equity and long term debt (eg; 60% equity, 40% long term debt - this is optimal mix) Area of discussion - will the business be generating sufficient cash flows from operations to pay the debt obligations - comfortably every month. legal obligations to pay back debt and interest no legal obligations to pay directors on shares always good to have equity in the mix, does your business has the capicity cost of equity - analyse it volume of money available in a given year to meet obligations are the cash flows from operations flat or variables? seasional cost of the debt, Tax deductability of interest Talk about - debt and equity ratio, sources of the debt will the bank lend us, can the subsidiary issue bonds to assian investors what currancy do we use to issue the bonds in USD, AUD, local currency ? Data can go in appendix - bulit point can be used.