Corporate Accounting ; Sample Assignment

Corporate Accounting 1
CORPORATE ACCOUNTING 22754
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Corporate Accounting 2
Table of Contents
Executive Summary.........................................................................................................................1
Introduction.....................................................................................................................................3
Evaluate Whether The Takeover of OAMPS by Wesfarmers in 2006 Was Value Enhancing To
Shareholders....................................................................................................................................6
Rationales behind OAMPS acquisition by Wesfarmers.............................................................6
Acquisition Method Employed During the Takeover................................................................7
Acquisition Analysis Based on Its Offer Price, the Mode of Payment As Well As Amount of
the Goodwill................................................................................................................................8
Amount of Goodwill....................................................................................................................9
Reaction of the market towards the takeover during the announcement date...........................9
Analysis of post-acquisition......................................................................................................10
Whether the takeover was value enhancing to different shareholders.....................................14
Conclusion.................................................................................................................................15
Reference List................................................................................................................................17
Appendices....................................................................................................................................19
Appendix 1: Income Statement..................................................................................................19
Appendix 2: Balance Sheet........................................................................................................21

Corporate Accounting 3
Executive Summary
The assignment was aimed to help students apply the knowledge and skills learnt in evaluating
whether takeover of OAMPS by Wesfarmers was value enhancing or not. As such, this report
presented analysis of OAMPS takeover by Wesfarmers in the year 2006.The report started
with a brief overview of the main rationale behind the takeover. It is then followed by
explanation of the chief method of takeover applied by Wesfarmers in acquiring OAMPS.
Further, the report presented detailed analysis of the takeover based on the offer price, the
method of payment as well as goodwill paid. It also presented analysis as to whether the
goodwill amount was justified and explanation of the market reaction toward the takeover. It
is then concluded by detailed explanation on whether the takeover was value enhancing or not
based on the post-acquisition analysis of the company’s financial performance by end of 2006.
From the analysis it is found out that the takeover enhanced value creation for the shareholders
since given that the Wesfarmers’ strength, this would accelerate competitiveness and growth of
this business. Hence, such coupled with numerous opportunities in the Wesfarmers would yield
tremendous result for the shareholders. Furthermore, given that Wesfarmers understand that the
OAMPS is people driven firm that preserve independence of the form broking activities while
creating a situation for both firms to leverage their combined strengths, the takeover would be
enhancing value creation to the shareholders. This is also based on the fact that the takeover
would deliver better outcomes for the clients and great opportunities for the employees. It was
also found out the takeover of OAMPS by Wesfarmers in 2006 can be said to be value
enhancing to the stakeholders. This is based on the fact that the takeover increases
shareholders wealth for both businesses and parties. Besides, given that earnings before
interest and tax increased three years after the acquisition, this is a clear signal that the

Corporate Accounting 4
takeover was essential and facilitated value creation to all shareholders of both the target
company which was OAMPS and Wesfarmers.

Corporate Accounting 5
Introduction
Takeover is one of the fastest means for organizations to up all the scale of their chief
operations, widen their product portfolio as well as enter to the new markets. Nonetheless, the
main question in relation to takeover is whether they destroy or enhance value creation to the
shareholders. It usually relies on how takeover is implemented and designed. Takeover that
starts with right vision or mission and implemented at right price is said to enhance the
shareholders’ value. Conversely, a takeover that starts with wrong vision or mission and
implemented at wrong price is said to destroy the shareholders’ values. The OAMPS is one of
the Australian largest public listed insurance brokers, with gross revenues of around $1 billion
in the year 2006. It is also the specialist underwriter as well as financial service provider. As
such this report presents analysis of OAMPS takeover by Wesfarmers in the year 2006.
Wesfarmers on the other hand is one of the Australian conglomerates running its operations in
New Zealand and Australia. The company engages in numerous operations like liquor,
convenience stores, supermarkets, home improvements, hotels industrial division and office
supplies. Having a net income of AU$65.98 billion in 2016, the company is considered as one
of the largest firm in Australia by revenue (Wesfarmers Ltd 2006). In addition, it is one of the
largest employers in Australia with over 220,000 personnel. This is aimed at evaluating
whether the takeover had any value enhancement to different shareholders involved. The
report starts with a brief overview of the main rationale behind the takeover. It is then
followed by explanation of the chief method of takeover applied by Wesfarmers in acquiring
OAMPS. Further, the report present detailed analysis of the takeover based on the offer price,
the method of payment as well as goodwill paid. It also presents analysis as to whether the
goodwill amount was justified and explanation of the market reaction toward the takeover. It

Corporate Accounting 6
is then concluded by detailed explanation on whether the takeover was value enhancing or not
based on the post-acquisition analysis of the company’s financial performance by end of 2006.
Evaluate Whether The Takeover of OAMPS by Wesfarmers in 2006 Was Value
Enhancing To Shareholders.
Rationales behind OAMPS acquisition by Wesfarmers
The rationale behind takeover of OAMPS by Wesfarmers in 2006 was mostly to help the firm
compete efficiently in the market. The takeover was also aimed to assist accelerate the
OAMPS growth as well as its competitiveness in the market through Wesfarmers’s strengths.
The takeover is also said to significantly help in lessening competition within the market for
the general insurance services and products as it would cause substantial consolidation in the
market (Theage.com 2007). The takeover was also aimed at providing Wesfarmers with more
differentiated operation base which would in turn enable it explore extra opportunities within
the financial sector. Besides, this takeover was to offer improved penetration and scale in the
specialist insurance levels with numerous platforms for the growth.
Basically, the takeover is considered as value-adding and logical proposal for its shareholders
and the OAMPS’ shareholders. The acquisition also builds on Wesfarmers 2003 takeover of
Lumley Insurance in New Zealand and Australia which was successfully integrated in
Wesfarmers’ insurance division. In fact the takeover is a strong business strategic fit for
Wesfarmers insurance division since both firms focus on developing employees, shareholders
returns as well as consumer services. Therefore, the takeover would create significant business
that would be strong rival within the insurance industry within Australia (Theage.com 2007).

Corporate Accounting 7
Besides, the takeover of OAMPS combined with Wesfarmers’ strong statement of the
financial position as well as superb credit rating creates a significant opportunity in accessing
the new underwriting niches and optimizing the reinsurance arrangements (Theage.com 2007).
The takeover is anticipated to be the EPS positive by year end and to meet the takeover’s
benchmarks. It was also anticipated to offer Wesfarmers with more differentiated business
base from which the company can explore extra opportunities within the financial industry.
Acquisition Method Employed During the Takeover
Wesfarmers applied the off-market takeover bid. This is based on the fact that its bid was
mainly subjected to regulatory approval as well as minimum acceptance of 90%. In fact,
OAMPS acceptance of the bid was subjected to absence of another higher bid or offer other
than the one offered by Wesfarmers (Akben-Selcuk & Altiok-Yilmaz 2011). In essence, off-
market bid was applied in this takeover since the takeover entails offer to all stakeholders of
OAMPS in purchase of their shares for specified amount. In essence, it is evident that an off-
market bid was applied evidenced by the fact that separate offers were given for different
classes of the shareholders. It is also evidenced by the fact that the takeover offer was
accompanied by bidder’s statement, which contained information that was designed in
enabling target stakeholders in assessing whether to accept the offer or not as well as
acceptance form (Theage.com 2007). It is also evident that this takeover employed off-market
bid since the bidder which in this case was Wesfarmers made individual offer directly to
OAMPS to acquire its securities. Here, the OAMPS management was free to make decision on
whether to accept the offer for the acquisition or not (Gregoriou & Neuhauser 2007). Given
that the bid entails setting out terms of the offer by Wesfarmers and committing the company
and the OAMPS to takeover bid agreement, it can be stated that the method of takeover

Corporate Accounting 8
employed in this case was off-market bid. In addition, the method of takeover employed in
this case was off-market bid evidenced by the fact that the agreement obliges OAMPS in
supporting takeover bid and in ensuring that OAMPS management recommend that is
stakeholders accept the acquisition offer provided by Wesfarmers ( Theage.com 2007).
Additionally, given that the agreement entered during the takeover by Wesfarmers set out how
OAMPS and Wesfarmers would work closely together during the takeover bid, this is a clear
signal that the method employed was off-market bid. Besides given that the takeover only
required 90% of the relevant interest in OAMPS shares and 75% of the non-bidder-held
securities by the close of the bid, it can be indicated that the takeover utilized off-market bid
technique during the acquisition of OAMPS.
This method was applied since it is less complex and easier to understand. Furthermore, off-
market bid was applied since it is less flexible compared to scheme arrangement in a takeover
and the offer price could be varied in order to result in an increase in its offer price.
Additionally, the off-market bid was applied since it is mostly made subject to some
conditions that in case triggered could enable the bidder in letting its bid lapses and all the
acceptances would be voided (Al‐Sharkas, Hassan & Lawrence 2008).
Acquisition Analysis Based on Its Offer Price, the Mode of Payment As Well As Amount
of the Goodwill
Wesfarmers offered to purchase shares of OAMPS at $4.5 per each share. In total, the
company made a total offer of around $700 million to the OAMPS (Theage.com 2007). This
offer was recommended by OAMPS board that it would offer Wesfarmers chances to contact

Corporate Accounting 9
the new underwriting slots as well as augment the reinsurance provisions within the market.
Wesfarmers helps 9.8% of the OAMPS shares; hence, the offer represented 29% premium to
the OAMPS’s average stock prices for 90 trading days (Insurance Journal 2006). In other
words, the takeover entailed an offer price of $4.50 for every share to all outstanding shares of
the OAMPS, which was valued at around $700 million. In this case, amount of dividend paid
to the OAMPS stakeholders from that date the announcement was made including final
dividend of around 11 cent for every share by 12th October 2006 would be subtracted from
offer price of around $4.50 every share (Smh.com 2007). The $4.5 per share offer price was
representing 26% premium to OAMPS volume weighted average share for 30 trading days
following the announcement (ACCC 2007). It also represented 29% premium to OAMPS
volume of the weighted average share prices for 90 trading days following the announcement.
It also represented 17% premium to OAMPS closing share prices by 4th September 2006 as
well as 2006 fiscal year price per earnings multiple of around 16.4 times (Theage.com 2007).
The takeover comprises of break-free of approximate 1% of bid value payables to the
Wesfarmers in specific situations (Wesfarmers Ltd 2006).
Goodwill which is considered as intangible assets recorded whenever an organization acquires
another firm. It comprises of prices that is paid for acquired firm minus the fair value of the
company net assets. In essence, to get identifiable assets one should subtract liabilities on
attained firm’s balance sheet from its fair value of the identifiable assets. Therefore, the
amount of goodwill paid by Wesfarmers for acquiring OAMPS was as follows;
Total amount paid to the OAMPS shareholders = $646,368
OAMPS assets before acquisition = 234,061

Corporate Accounting 10
Liabilities = 195,252
The fair value of the identifiable assets for the takeover = 234,061 – 195,252 = 38,809
With these it is evident that the amount of goodwill arising on the acquisition was as follows;
Cost of the takeover = cash paid to the shareholders + the costs associated with the acquisition
= 646,368 + 23,726 = 670,094
Goodwill = net cost of the takeover – fair value of the identifiable net assets
= 670,094– 38,809 = 631,285
Amount of Goodwill
The amount of goodwill is usually the variance between costs of the investment in the firm’s
acquiring the other firm financial report and value attributable to numerous liabilities and
assets subjected to acquisition in consolidated financial report. The amount of goodwill
offered; that is $557,370 was justified since it represented appropriate premium and was the
fair and full value for the OAMPS as whole. This is based on the fact that the value was far
higher than the net cash outflow on the takeover;
The net cash flow on the takeover was as follows;
Net cash acquired on the operating account 7,485
The net cash acquired on the broking trust 85,580

Corporate Accounting 11
Cash paid 670,094
The net cash outflow 577,029
In essence, the goodwill amount computed above was justifiable since it is based on the fair
value of the identifiable assets as well as liabilities of the OAMPS which was known at the
date of the acquisition. This amount is fair since it is arising from numerous aspects including
the synergistic savings which was arising from combination of the administrative and
underwriting activities with the current Group operations, inseparable intangible assets like
employees’ experience and skills as well as savings from delisting of the OAMPS.
Reaction of the market towards the takeover during the announcement date
Any time entity takeover another, different individuals within the market have different
reactions towards the takeover. In this case, after the announcement of OAMPS takeover bid,
its stock price is said to move upwards. This was based on the fact that OAMPS shareholders
expected the acquiring company to pay a specified amount of premium for the takeover. These
premiums are usually implausible for approvals by shareholders of OAMPS unless the stock
prices of are viewed to be a above or higher than the prevailing market prices. Under the
OAMPS acquisition, Wesfarmers equates its bid to higher stock price compared to the present
or existing price of the acquired firm; hence, there was increased incentive for different
shareholders in OAMPS in selling the shares to Wesfarmers. Hence, with announcement of
OAMPS takeover by Wesfarmers, market price of OAMPS increased on daily basis. This was
based on the notion that a good number of investors were rushing to purchase OAMPS shares
in order to enjoy higher price per share purchased once Wesfarmers acquire the company. In

Corporate Accounting 12
other words, after announcement of OAMPS takeover, potential investors and existing
shareholders were trying to purchase as many shares as possible in anticipation that once the
takeover is approved, they would be in a position to sell the shares at higher price enabling
them to make significant amount of return. In addition, the takeover was aimed at helping
Wesfarmers achieve significant rank within the insurance and financial industry. The takeover
aimed to assist Wesfarmers accomplishes its chief commitment to offer the leading insurance
services to its clients.
Analysis of post-acquisition
The post-acquisition resulted in doubled year insurance sales for Wesfarmers by year end
2006, adding around $1 billion shares to its current existing insurance segments gross sale of
around $1.1 billion in the previous year. Besides, with the takeover, Wesfarmers insurance
division had pro-forma gross revenue in 2006 of around A$2.1 billion ( Wesfarmers 2007).
Furthermore, from Table 1 below, it is evident that after the acquisition, Wesfarmers and its
subsidiaries was able to achieve an increasing net income. This is evidenced by the fact that
the company net income increased from 786 million in 2007 to 1,063 million in the year 2008
and later to 1,522 million by 2009 (Wesfarmers 2009). Besides, after the acquisition,
Wesfarmers and its subsidiaries was able to accomplish operating revenue of approximate
$1.4 billion with some solid support from the targeted market industries. Besides, during this
period, earnings before interest and tax was around $130 million while its divisional insurance
margin during this period was 9.5% and its combined operating ratio was around 94.2%. This
trend is said to have changed with the company recording increase in the EBIT with the most
recent being 2,229 million in 2008 to 2,977 in 2009 as shown in Appendix 2 below.

Corporate Accounting 13
Table 1: Wesfarmers and subsidiaries performance after the acquisition
2007 2008 2009
Net profit after tax 786 1,063 1,522
Dividends per share 225 200 110
share price 45.73 37.3 22.76
Earnings per share 195.2 174.2 158.5
Return on equity 25.1 8.6 7.3
Source: Wesfarmers (2009)
Further, it is evident from Table 1 below that dividend per share for Wesfarmers and its
subsidiaries decreased from 225 million in 2007 to 110 million in 2009. The decrease was not
necessarily attributed by the takeover but was as a result of the great recession which was
experienced in 2008/2009. Despite the decreased dividend per share, it is evident from
Appendix 2 below that interest increased significantly especially between 2008 and 2009
moving from 4.9 times to 5.3 times in 2009 (Wesfarmers 2009). Besides, Wesfarmers and its
subsidiaries return on equity are found to have decreased from 8.6 in 2008 to 7.4 in 2009. This
was mainly attributed by increased assets with a greater margin compared to increase in the
net income. Gearing or debt/equity is said to have decreased over the same period moving
from 47.3% to 18.3% in 2009. This is a clear sign that after the takeover, Wesfarmers has been
able to manage its financing and is now heavily reliance on equity financing instead of debt
finance.

Corporate Accounting 14
Figure 1: Earnings, Dividends and Cash Flow
400
350
300
250
200
150
100
50
0
2006 2007 2008
EPS Operating Cash flows
Dividend
Source: Wesfarmers (2009).
Based on Table 1, Figure 1 and Appendix 2 below, it can be stated that after the takeover,
Wesfarmers EPS experienced a significant decreased moving from as high as 195.2 in 2006 to
158.5 in 2009. Further, after the takeover, it is evident from Appendix 1 that the company total
revenue increased with a significant margin increasing from 9,754 million in 2007 to 33,584
in 2008 and later to 50,982 in 2009. Moreover, after the takeover, it is evident that

Corporate Accounting 15
Wesfarmers operating cash flows increased from around $2.47 per share in 2008 to around
$3.25 per share in the financial year 2009 (Wesfarmers 2009).
Furthermore, it is evident from Appendix 2 below that after the takeover; shareholder’s equity
of Wesfarmers increased with year 2008 recording 19,598 and year 2009 the company
recording shareholders’ equity of around 24,252 (Wesfarmers 2009). This means that the
takeover enhanced different shareholders to invest in the company; hence, the increase in
shareholder’s value. The depreciation and amortization of the company increased over three
years after the takeover with the company recording depreciation and amortization of around
660 million and in 2009 the company recorded depreciation and amortization of around 1,024
million. Furthermore, after the acquisition, it is evident that the company capital expenditure
on the PPE and the intangibles increased over the next three years after the acquisition. This is
evident by increase in capital expenditure from 1,241 million in 2008 to 1,503 million in 2009
(Appendix 2).
Whether the takeover was value enhancing to different shareholders
The takeover of OAMPS by Wesfarmers in 2006 can be said to be value enhancing to the
stakeholders. This is based on the fact that the takeover increases shareholders wealth for both
parties and companies. The takeover would be value enhancing since combination of the
Wesfarmers insurance division and the OAMPS would create significant business operations
which would be strong rival in insurance sector within the country. In addition, the takeover
was value enhancing since both firms were mostly focused on the customer service,
developing employees as well as on the shareholder’s returns; therefore, combining them
would enhance greater shareholder’s returns over time. In essence, the takeover would be

Corporate Accounting 16
value enhancing since it combines the strong balance sheet as well as credit rating of the
Wesfarmers and OAMPS’ specialists or professional underwriting skills which would assist in
creating opportunities in accessing new underwriting slots and in optimizing the reinsurance
schedules. In addition, the takeover enhanced value creation since the offer represented best
outcome for the OAMPS stockholders both in certainty and price. Besides, given that earnings
before interest and tax increased in the year 2007, 2008 and 2009, this is a clear signal that the
takeover was essential and facilitated value creation to all shareholders of both the target
company which was OAMPS and Wesfarmers. In addition, given that the acquisition of
OAMPS contributed around $24.8 million in net income for Wesfarmers, this is a good
indication that the takeover was value creating or enhancing to different shareholders. Besides,
with Wesfarmers having recorded a net profit of around $1,063 million in 2008 and $1,535
million in 2009 which is a significant increase of about 20% excluding impact of sales of the
Australian Railroad Group, this is enough evidence that the takeover enhanced value creation
to all the shareholders. Moreover, given that Wesfarmers operating cash flows increased by
21% to around $2.47 per share in 2008 to $3.24 per share in the year 2009, it can be indicated
that the takeover was value enhancing to different shareholder.
Besides, with the takeover having contributed around $24.8 million in net income for
Wesfarmers, this is another clear sign that the takeover was significant to all the shareholders
since increase in net income means higher returns or EPS for the shareholders. Additionally,
given that after the takeover Wesfarmers was able to normalize its earnings per share by over
23% to approximate $195.2 in 2007 to around $174.2 in 2008 and later to $160 in 2009, this
means that the takeover added greater value to different shareholders. Another sign which
could be interpreted as a good signal to value creation for the shareholders was the fact that

Corporate Accounting 17
debt decreased from 9,276 million in 2008 to 4,435 million in 2009. Such implies that all the
shareholders have been enjoying relatively low debt burden after the acquisition.
Given decreased interest coverage from 4.9 in 2008 to 5.3 in 2009, it can also be stated that
the deals enhanced value creation to the shareholders. The decrease was attributed by
decreased debts which are in turn resulted in decreased interest rates. Further, provided that
Wesfarmers shareholders’ equity increased three years after the acquisition, this is a sign that
the company was now effective enough in utilizing its shareholders’ equity to produce some
income. This is based on the fact that increased shareholder’s equity means increased
shareholders’ value in the company which they are likely to enjoy in terms of dividends at the
end of the year. Besides, with increased stock price after the takeover, it is evident that this
takeover was value enhancer to all shareholders since higher stock price means higher returns
for the company and in turn higher dividends would be offered to the shareholders.
With these, it is evident that the takeover enhanced value creation to all the shareholders.
Additionally, given that Gearing or debt/equity decreased after the takeover, this is a good
signal sign that the takeover, was value enhancer to different shareholders since decreased
debt/equity implies that Wesfarmers was able to manage all its financing and was currently
utilizing shareholders’ equity to finance its operations. This is a greater stride since with
decreased debt financing it means that the company is not volatile to being liquidated.
Conclusion
In conclusion, takeover is one of the fastest means for organizations to up all the scale of their
chief operations, widen their product portfolio as well as enter to the new markets.

Corporate Accounting 18
Nonetheless, the main question in relation to takeover is whether they destroy or enhance
value creation to the shareholders. The OAMPS was one of the Australian largest public listed
insurance broker, with a gross revenue of around $1 billion in the year 2006. It is also the
specialist underwriter as well as financial service provider. Wesfarmers on the other hand is
one of the Australian conglomerates running its operations in New Zealand and Australia.
Based on the above analysis it can be concluded that the takeover enhance value creation for the
shareholders since given that the Wesfarmers’ strength, this would accelerate competitiveness
and growth of this business. Hence, such coupled with numerous opportunities in the
Wesfarmers would yield tremendous result for the shareholders.
Furthermore, given that Wesfarmers understand that the OAMPS is people driven firm that
preserve independence of the form broking activities while creating a situation for both firms to
leverage their combined strengths, the takeover would be enhancing value creation to the
shareholders. This is also based on the fact that the takeover would deliver better outcomes for
the clients and great opportunities for the employees. It can also be concluded from the analysis
that the takeover of OAMPS by Wesfarmers in 2006 can be said to be value enhancing to the
stakeholders since it increases shareholders wealth for both business and parties. It can also be
stated that the takeover was value enhancing since combination of the Wesfarmers insurance
division and the OAMPS would create significant business operations which would be strong
rival in insurance sector within the country. Additionally, based on the financial analysis
during the post-acquisition, it is evident that the takeover was value enhancing since both
firms were mostly focused on the customer service, developing employees as well as on the
shareholder’s returns; therefore, combining them would enhance greater shareholder’s returns
over time.

Corporate Accounting 19
In essence, the takeover would be value enhancing since it combines the strong balance sheet
as well as credit rating of the Wesfarmers and OAMPS’ specialists or professional
underwriting skills which would assist in creating opportunities in accessing new underwriting
slots and in optimizing the reinsurance schedules. In addition, the takeover enhanced value
creation since the offer represented best upshot for the OAMPS stockholders both in certainty
and price. Further, it can be stated that the takeover of OAMPS by Wesfarmers was value
enhancing to the shareholder since it was able to normalize Wesfarmers’ earnings per share by
over 23%, meaning that the takeover added some value to all the shareholders in terms of
EPS.

Corporate Accounting 20
Reference List
ACCC 2007, Wesfarmers Limited - proposed acquisition of OAMPS Limited: Available from:
http://registers.accc.gov.au/content/index.phtml/itemId/764466/fromItemId/751043 [Access at
25th May 2018]
Akben-Selcuk, E & Altiok-Yilmaz, A 2011, ‘The impact of mergers and acquisitions on acquirer
performance: Evidence from Turkey,’ Business and Economics Journal, 22, 1-8.
Al‐Sharkas, AA, Hassan, MK, & Lawrence, S 2008, ‘The impact of mergers and acquisitions on
the efficiency of the US banking industry: Further evidence,’ Journal of Business Finance &
Accounting, 35(1‐2), 50-70.
Gregoriou, G & Neuhauser, K 2007, Mergers and acquisitions: current issues. Springer.
Harford, J, Jenter, D & Li, K 2011, ‘Institutional cross-holdings and their effect on acquisition
decisions,’ Journal of Financial Economics, 99(1), 27-39.
Insurance Journal 2006, Wesfarmers Makes $534 Million Offer for Australian Broker OAMPS:
Available from: https://www.insurancejournal.com/news/international/2006/09/07/72142.htm
[Access at 25th May 2018]
Kumar, S & Bansal, LK 2008, ‘The impact of mergers and acquisitions on corporate
performance in India,’ Management Decision, 46(10), 1531-1543.

Corporate Accounting 21
Liargovas, P & Repousis, S 2011, ‘The impact of mergers and acquisitions on the performance
of the Greek banking sector: An event study approach,’ International Journal of Economics and
Finance, 3(2), 89.
Marembo, J 2012, ‘The Impact of Mergers and Acquisitions on the financial performance of
Commercial Banks in Kenya,’ Unpublished MBA thesis. University of Nairobi.
Reiser, I & Nishikawa, RM 2010, ‘Task‐based assessment of breast tomosynthesis: Effect of
acquisition parameters and quantum noise,’ Medical physics, 37(4), 1591-1600.
Slobin, DI 2014, The crosslinguistic study of language acquisition (Vol. 4). Psychology Press.
Smh.com 2007, W'farmers triggers chase for OAMPS: Available from:
https://www.smh.com.au/news/business/wfarmers-triggers-chase-for-oamps/
2006/09/05/1157222131439.html [Access at 25th May 2018]
Theage.com (2007), Wesfarmers makes takeover offer for OAMPS: Available from:
https://www.theage.com.au/news/business/wesfarmers-makes-takeover-offer-for-oamps/
2006/09/05/1157222107331.html [Access at 25th May 2018]
Wesfarmers Ltd (2006), Wesfarmers Ltd 2006 annual report: Available from:
https://www.wesfarmers.com.au/docs/default-source/asx-announcements/wesfarmers-2006-
annual-report.pdf?sfvrsn=0 [Access at 25th May 2018]

Corporate Accounting 22
Wesfarmers 2007, Wesfarmers Ltd 2007 annual report: Available from:
https://www.wesfarmers.com.au/docs/default-source/reports/2006-2007-annual-report.pdf?
sfvrsn=2 [Access at 25th May 2018]
Wesfarmers Ltd 2009, Wesfarmers Ltd 2009 annual report: Available from:
https://www.wesfarmers.com.au/docs/default-source/reports/2009-annual-report.pdf?sfvrsn=2
[Access at 25th May 2018]

Corporate Accounting 23
Appendices
Appendix 1: Income Statement
2008 2007 %
increas
e/decre
ase
Revenue 33,584 9,754 244.3
EBITDA 2,897 1,650 75.6
EBIT 2,243 1,305 71.9
Net profit (the pre
non-trading
components)
1,119 786 42.4
Net profit (the post
non-trading
1,050 786 33.6
Operating cash
flow
1,451 1,301 11.5
Earnings per
share
178.8 201.1 (11.1)
Cash flow per
share
247.2 341.5 (27.6)
Dividends per
share
200 225 (11.1)

Corporate Accounting 24
Appendix 2: Summary of the performance of the company after acquisition
2009 2008
Revenue
net profit before interest and tax
net profit after tax
Dividends
total assets
net debt
Shareholders’ equity
Capital expenditure
Depreciation and amortization
50,982
2,977
1,535
1,102
39,295
4,435
24,252
1,503
1,024
33,584
2,229
1,063
1,533
37,178
9,276
19,598
1,241
660
earnings per share
Dividends per share
tangible assets per share
o perating cash flow
158.5
110
3.14
3.25
174.2
200
-1.36
2.47
Return on equity
Gearing
Interest cover (cash basis)
7.4%
18.3%
5.3x
8.6%
47.3%
4.9X