Week 7 Fin 6301

Essay Instructions:

For your final essay, you will be applying the concepts learned throughout this course to an analysis of a merger or an acquisition. Much of the information you will need to complete this analysis can be found in the company's annual report. You may choose any recent merger or acquisition (within the last 5 years). Using the concepts from this course, you will analyze the success of the merger or acquisition. The completed project should include the information listed below. Provide an introduction to the companies involved in the merger or acquisition. Include the companies’ background information and the reasons for the merger. Evaluate the financial statements of both companies (balance sheet, income statement, cash flow statement). Evaluate the potential and actual risks that occurred during the merger and what the companies could have done differently to mitigate these risks. Discuss the companies’ management of human capital in the merger or acquisition. Evaluate the soundness of the company’s financial policies after the merger (e.g., capital structure, debt, leverage, dividend policy, enterprise risk management, and others.) based on the material covered during class. Include a synopsis of your findings, including your recommendations and rationale for whether the merger or acquisition was beneficial to both companies and your recommendation on best practices for moving forward. This analysis should be at least three pages in length, not counting the title and reference pages. Support your findings and recommendations with evidence from the annual report and at least five scholarly sources, such as the textbook, industry reports, and articles from the CSU Online Library. Use APA format to cite and reference all sources, including any websites that were used to access company information.

Essay Sample Content Preview:

Salesforce acquisition of Slack Name: Institutional Affiliation: Course: Date: Introduction Salesforce is a global company that deals with customer relationship management (“CRM”) technology which brings companies and their customers together (Salesforce, 2023). Established in 1999, the company has a key mission of empowering organizations across diverse sectors and scales so that they leverage the existing cutting-edge technologies to revolutionize their approach to customer engagement. Salesforce strategically facilitates seamless connections with customers, thus facilitating a transformative shift in business operations towards customer-centricity particularly in today’s digital landscape (Case, 2021). The acquisition of Slack by Salesforce, completed in December 2020, marked a significant strategic move aimed at strengthening Salesforce's position in the competitive cloud software market. On the other hand, Slack, established in 2013, is a popular collaboration platform that facilitates communication and teamwork among employees. Background Information and Reasons for the Merger Salesforce's acquisition of Slack was driven by several key factors. Firstly, Salesforce sought to enhance its cloud software offerings and expand its footprint in the rapidly growing collaboration software market. By integrating Slack's communication and collaboration capabilities into its CRM platform, Salesforce aimed to provide customers with a comprehensive solution for managing customer relationships and internal communications (Salesforce Financial Report, 2023). Additionally, the acquisition presented an opportunity for Salesforce to diversify its revenue streams and capture new market segments, particularly in the remote work and digital collaboration space. The acquisition of Slack saw the company integrate a new product line called Slack Offering, a system of engagement that digitally connects customers, employees, business partners, and systems with workflow and appropriate applications. Through Slack, Salesforce grants organizations the opportunity to build a digital headquarters while working efficiently by supporting ways through which people work asynchronously, informally, in-person, or remotely. Salesforce continues to innovate and has so far integrated Slack across its Customer 360 platforms. Financial Statement Evaluation An examination of Salesforce and Slack’s financial statements before and after the acquisition gives us an idea of their financial performance. Before the transaction, Salesforce demonstrated low to moderate revenue and earnings growth, primarily through it is core CRM Business as well as expanding its portfolio of products (Table 1). Description 2019 2020 Revenue 13282 17098 Cost of revenue 9,831 12,863 Net Income 1110 126 Table 1 After the acquisition of Slack, Salesforce recorded a fairer increase in revenue as well as net income (figure 2). Nonetheless, the overall financial assessment post the $27 billion Slack acquisition indicates that while Salesforce made some profits, the acquisition of Slack in 2020 has not significantly changed the financial trajectory of the company. ...

Updated on June 21, 2024

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