Merger and Acquisition of Hoya Corporation and Pentax .

Topics: Financial ratio, Inventory, Balance sheet Pages: 4 (764 words) Published: December 27, 2010
2.0 Pre-Merger and Post-Merger Financial Analysis and Financial Performances of Hoya Corporation

2.1 Liquidity Ratio

The current ratio is one of the most commonly cited financial ratios, measures the firm’s ability to meet its short-term obligations. Before HOYA merged with PENTAX, the current ratio for HOYA in year 2006 is 2.7 and in year 2007 is 3.5. After merger, the current ratio of HOYA decreases to 2.4 which is a big change before and after merger. Luckily in year 2009 the current ratio of HOYA increases to 2.9. The normal current ratio should more than 1.00 because that’s mean the current assets can cover the current liability.



Net working capital is also known as net current assets because it is current assets minus current liabilities. Based form the graph showed, in the pre-merger part, the net working of HOYA increase from RM132968 to RM197525 in year 2006 to year 2007. After HOYA merged with PENTAX, the net working capital of HOYA increasing from RM241417 to RM253476 in year 2008 and year 2009.

2.2 Debt Ratio

The debt ratio measures the proportion of total assets financed by the firm’s creditors. The higher this ratio, the greater the amount of other people’s money being used to generate profits. In the year 2006, the debt ratio of HOYA is 22.44% and decrease to 18% in year 2007. After merged with PENTAX, the debt ratio of HOYA started to increase in year 2008 and 2009, from 42.76% to 42.81%. The increase in debt ratio is a bad feedback from the merger because the merged between HOYA and PENTAX can effect HOYA become more liabilities.

2.3 Profitability Ratio

The firm’s earnings per share (EPS) are generally of interest to present or prospective stockholders and management. Earnings per shares represent the number of money earned during the period on behalf of each outstanding share of common stock. In this case,...
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