Mergers and Acquisitions: The Performance of the Acquiring Firm-Empirical Study of Cheverontexaco

This paper analyzes a merger in the oil industry; in the case of Chevron and Texaco. Oil is assumed to be a homogeneous good which is produced by a small number of firms with different unit costs. Merger formation is endogenously explained as a result of cooperative decisions. It is shown that merger participants are very asymmetric if prior costs of production differences are moderate. If cost differences are large, however, the more efficient firms participate in the mergers to enjoy production efficiency, while the least efficient firms are not attractive partners and, therefore, remain independent in the post-merger market. Moreover, the research tries to investigate Chevron share returns if the merger has achieved its goal of maximizing shareholders wealth

The Effect of International Financial Reporting Standards (IFRS) on the Relationship Between Accounting Information and Stock Prices on the Ghana Stock Exchange

This study sought to find the ability of accounting information to explain stock price movement on the Ghana Stock Exchange (GSE) and the effect International Financial Reporting Standards (IFRS) in explaining stock price movements. Two multiple regression models were used to ascertain how accounting information was relevant in explaining stock prices as well as to test whether the adoption of International Financial Reporting Standards (IFRS)  has an effect on value relevance. Four single regression models was used to explain how accounting variables contribute to explaining stock price.  The study regressed the stock prices on accounting data as well as annual interest rate to determine their relationship. In general the study found that accounting information, specifically earnings, Price to earnings ratio and Return on Equity was relevant   in explaining stock price movements in both   in pre-adoption IFRS and post- adoption IFRS periods in Ghana. The study also found that the adoption of IFRS did not have any effect on the ability of accounting information to explain stock price movements. Keywords: Accounting information, Value relevance, IFRS

Cash Budgetan Imperative Element of Effective Financial Management

A firm’s life highly depends on the availability of funds to meet impending obligations as well as efficient employment of excess funds so as to minimize wastages. This paper focuses on cash budgets as a tool that every financial manager should use in ensuring availability as well as effective utilization of cash. Whilst excess liquidity communicates a mangers lack of investment innovativeness, lack of funds to meet short term obligations could also depict a manager’s inability to plan on where and when to get adequate funds for business activities at a lower cost in the short term. Another area of interest in the paper is the role of effective financial management in any organization. Nevertheless, the paper concludes that cash budget preparations enable managers to identify possible future liquidity challenges and at the same time creates a platform for addressing such challenges