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Merger and acquisition is the process of joining two or more companies as one company either by combining them or by acquiring (one company purchases another company or companies) and form a larger business unit. Any transaction related to above deal is called as a Merger and acquisition deal.In merger and acquisition deals companies will do months of research on potential targets and after shortening them they further go deep and understand more about the company or companies (about their finances, operations etc.) and check their financial viability.Steps involved in M&A deal are as follows −Preliminary discussions.Evaluation and assessment of ... Read More
The issues in merger and acquisitions are as follows −Financial issues − Buyers will do the analysis of all the financial matters of sellers. It includes past statements, financial metrics and future performances. All monthly statements, audited reports, liabilities, assets, revenue margins, etc. are analysed by the buyer.Technology and intellectual property − Buyer sees technology and intellectual property of seller. It is observed what kinds of steps are taken by the seller to protect its properties, litigations. Moreover, it is observed what kind of licensed technology and how those can help the business, technology history, is there any patents (either ... Read More
Goods and service tax (GST) levies a single tax rate for all goods (supply) and services (not in India) whereas sales and service tax (SST) is the multiple tax rate system.GST is the indirect and unified tax rate levied on goods (supply) and services whereas sales and service tax is levied only once (tax levied on any taxable services carried out by individuals who are eligible for tax).Goods and service tax (GST)GST tax is levied on sales of goods, lease, exchange, supply or disposal (of goods and service). Items excluded from liquor, petroleum and natural gas, real estate. The GST ... Read More
GST is one of the major reforms in Indian taxation system. The main aim is to remove the cascading effect. Cascading effect is nothing but double taxation.GST is value addition tax which is imposed on goods and services (production, distribution and consumption).On the other hand value added tax (VAT) is an indirect tax imposed at every single stage of goods (manufacturing, distribution) on incremental value.Value added taxValue added tax (VAT) is levied by the state government at every single level of goods production and distribution. So the VAT system is a multiple point tax.In this tax system, purchase of goods ... Read More
Central sales tax (CST) is charged by the central government on interstate sales and collected by the state in which sales are made. Value added tax (VAT) is the multipoint tax collected at different stages of production and distribution.Central sales taxCentral sales tax (CST) comes under indirect tax levied by either central government or state government on sales. Retailers are responsible for collecting these taxes from customers and submit them to tax authorities.Central government levied tax on interstate sales whereas the state government levied tax on intrastate sales. Charges depend on commodities and can vary depending on commodities. Not all ... Read More
The term profit will differ from profession to profession. Businessmen will have different perspectives in terms of profit, economists will have different perspectives. According to accounts profit is nothing but excess of revenue over expenses.This profit is called accounting profit. Taxable profit had a different sense, amount taxable as per provisions of income tax act. Taxable profit is calculated by taking accounting profit, non-allowable expenses (added), allowable expenses (subtracted) and the resulting income is credited in a P & L account.Accounting profitIt results from operating activities and non-operating activities of the company. Accounting profit is the financial gain which is ... Read More
Acquisition strategy is the approach of acquiring products, services, and business by considering factors like brand, financial impact, culture, product etc. It plays a significant role in business expansion and plays part in growth of business.ElementsThe elements of an acquisition strategy are as follows −Business strategy − Talks about contracting approach (type of contracts, leasing arrangements etc.)Contracting strategy − Provides analysis and rationale.Major contracts − Identification of contracts and its types.Incentivise − Tells about incentives in detail.Technical data management − Long term technical data needs are assessed.Sustainment − Tells about acquiring integrated product support.StrategiesThe strategies of an acquisition strategy are ... Read More
Merger is the process of combining two or more different companies as one company.Acquisition is the process of taking control of one company by another. Consolidation of companies is called merger and acquisition. The main objective is wealth maximization and to create/increase their value.Merger and acquisition can be done by the followingAsset purchasing.Shares purchased.Trade of shares for assets.Trade of shares to share.Important considerations for the merger and acquisition are as follows −Companies must be ready to take risks.Companies must narrow down from multiple bets.Companies should be patient, resilient and adapt to change.StepsThe steps for merger and acquisition are as follows ... Read More
Post-Merger Integration (PMI) is a process of merging two or more firms/organizations/companies to increase synergies and reach their forecasted value.Top executives, stakeholders, team members, Human Resources (HR), new management will take responsibility for post-merger activities. There is no period to complete the deal.Every merger has their own time frame (may be months, years).Post-Merger Integration (PMI) includes the following −Recruiting process − Based on short, long term needs, process and compensations.Overlap − Includes layoffs, benefit forms, securing top employees.Technology − Includes merger systems and new organisation charts.Performance − Includes training to employees, documents for review etc.AreasThe areas that come under the ... Read More
The main purpose of mergers and acquisition is to form different or same individual companies into one unit.Merger means combining similar companies (size) to form a new single unit whereas acquisition is when larger companies acquire smaller companies or absorption of smaller companies by bigger companies. Depending on the acquirer company board, the merger and acquisition can be friendly or hostile.Types of mergerThe types of merger are as follows −Horizontal − Merger between two similar companies.Vertical − Merger between company and customer/company in its supply chain.Conglomerate − Merger between companies in different sectors.Forms of integrationStatutory − Occurrence merger when acquirer ... Read More