Pro-Forma Balance Sheet Exercise

Video Explanations of M&A Model Exercises

Exercise 5: Outputs and Analysis in Acquisition

Computing Pro-forma Balance Sheet in Acquisition

Exercise 6: Balance Sheet and Pro Forma

Cash Flow Sweep with Crash and Default Analysis

Exercise 7: Cash Flow Sweep and Default

Tax Aspects of Acquisition Model

The tax aspects of an acquisiton model can become somewhat complex, particularly in the rather typical situation where purchase accounting is used for book purpoes, but for tax purposes the transaction is treated as a tax free exchange. When this case, the tax depreciation will be different from the book depreciation and deferred taxes will arise. Furthermore, the deferred taxes will expire as the existing assets retire unlike deferred taxes related to on-going capital expenditures and normal growth. A number of the complex issues associated with modelling tax aspects of an acquisition are addressed in Excecise 6. Other issues associated with taxes such as NOL and depreciation are covered in the corrporate fnance model exercises.