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Summary Various topics in management accounting $4.09
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  2.  
  3. Stellenbosch University (SUN)
  4.  
  5. Management Accounting 771

Summary

Summary Various topics in management accounting

 27 views  1 purchase
  • Course
  • Management Accounting 771
  • Institution
  • Stellenbosch University (SUN)

Variance analysis Valuations Transfer pricing Risk Investment decision Pricing decision and profitability working capital hedging CVP Capital Structure Budgets Analysis of information ratios Acquisitions by shares and debt summary

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Document information

  • February 3, 2022
  • 3
  • 2020/2021
  • Summary

Subjects

  • variance
  • analysis
  • valuation
  • valuations
  • transfer
  • pricing
  • risk
  • investment
  • invest
  • working
  • capital
  • hedge
  • equity
  • hedging
  • profit

Written for

  • Stellenbosch University (SUN)
  • Management Accounting 771
All documents for this subject (14)

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JanHendrikBasson

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ER based on EARNINGS
Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5
- No synergies - All synergy benefits to - All synergy – benefits to - Synergy benefits share - Synergy earnings
EPS (t) Target the acquirer proportionally between A proportionally shared ( not
ER= - Calc Max number of shares - Need to calc Min ER ratio and T ( Stipulated %) specified which portion)
EPS(a)
- Earnings for each A is willing to issue - T shareholders don’t want SE
EPS ( t ) +%
shareholder remains the - A shareholders should not to lose i.t.o. earnings. N (t ) -
be in worse position after - If advise the T, need to calc - ER= EPS (t )
same SE ER=
- MV of A shareholders merger the Min ER ratio EPS ( a ) +% EPS (a)
N ( a)
decrease - If advise A, need to - Earnings of both T and A
- MV of T shareholders determine Max ER EPS ( t ) shareholders increase with
ER= - Earnings of both A and T
increase SE shareholders will increase the same %
SE EPS ( a ) +100 %
- We cannot control the MV. EPS ( t ) +100 % N (a)
N (t ) - A shareholders earnings
ER=
EPS (a) increase
- A shareholders earnings - T shareholders earnings
remain the same remain the same.
- T shareholders earnings
increase




STEPS

1. Calculate the ER based on the scenario

2. Calculate the new number of issued shares by A

MERGED EARNINGS(m)
3. Calculate the new EPS post merger - EPS ( m )=
NEW NUMBER ISSUED SHARES

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