Financial Analysis and Merger: A Study of Baby Bunting and G8 Education

Financial analyst

TABLE OF CONTENT
INTRODUCTION..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explaining financial performance................................................................................................3
Comparing the financial analytical results of the two companies and justifying reason for
timely merger...............................................................................................................................5
Articulation of the strengths and weakness with porter's five forces and Swot analysis.............7
Elements of merger's value for assessing the maximum potential..............................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Financial analysis is concerned with assessing information regarding its cash flow,
monetary position, income & expenditure, etc. so that reliable evaluation of its health can be
identified. In the current era, financial analysis is important in order to identify relevant
information of financial transaction in turn higher ability in turn strategic management decision
can be formulated. The current report will involve information regarding profitability, leverage
and liquidity ration. It will comprise detail regarding why merger is timely required to for the
companies. Presents study will involve details related to strengths and weaknesses, using Porter's
Five Forces model and SWOT Analysis of the merger and acquisition project using the
Consolidated Financial Results. Current study will highlight elements that shape the merger's
value creation and assess its potential to maximize its triple-bottom-line performance.
MAIN BODY
Explaining financial performance
Calculating ratios of Baby Bunting and G8 Education
Profitability Formulae
Baby
Bunting G8 Education Total
2021 2020
Gross Profit Per Profit and Loss $1,44,764 -$1,87,010.00 -$42,246
Gross Profit Margin Gross Profit / Sales 31% -24% 7%
Net Profit Before Tax Per Profit and Loss $23,257 -$2,04,177 -$1,80,920
Net Profit Before Tax
Margin
Profit Before Tax / Net
Sales 5% -26% -21%
Net Profit After Tax
(incl Comprehensive
Loss) Per Profit and Loss $17,532 -$1,87,010 -$1,69,478
Net Profit After Tax
Margin Profit After Tax / Net Sales 4% -24% -20%
Return on Assets Net Profit Before Tax / 6% -10% -4%

Total Assets
Return on Equity
Net Profit Before Tax /
Total Equity 17% -26% -8%
Leverage Formulae
Baby
Bunting G8 Education Total
2021 2020
Debt to Equity Ratio
Total debt/total
equity 1.67 1.60 3.04
Debt to Asset Ratio
Total debt /total
assets 0.63 0.61 1.2
Interest Coverage Ratio
(Net Profit Before
Tax + Interest
Expense) / Interest
Expense 6.02 -13.08 -7.06
Leverage
Current Ratio
Current assets/
current liabilities 1.21 1.25 2.46
Quick Ratio
Current assets-
inventory/ current
liabilities 0.25 1.25 1.50
From the evaluation of above presented information regarding profitability and leverage
ratio it can be specified that in individual performance of G8 Education there is negative
outcome. The individual performance of Baby Bunting it can be said that its profitability and
leverage ratios are positive that is indicating that its performance is indicating strong position.