ACCOUNTING ANALYSIS

[Name of the Institute]

Accounting Analysis

Introduction

The paper is about the acquisition of two largest companies of the world, Apple and Host Marriott Financial Trust. Since the Host Marriott Financial Trust is losing the market share in United States of America therefore it would be appropriate for both of the companies to capture the maximum market shares. Apple has already strong financial position while the Host Marriott Financial Trust is currently losing market share in United States of America, therefore it will be appropriate for Host Marriott Financial Trust to capture market share while for Apple to capture maximum shares in the market. On the other hand if the firm Host Marriott Financial Trust is acquired by the Apple then the financial position of the Host Marriott Financial Trust will also get strong with having good market share.

Discussion

Assuming the five possible synergies on the basis of which Apple will acquire Host Marriott Financial Trust will be the Revenue, The Net Income, The earnings per share, the dividend and the outstanding shares. (Pinker, 2013) The current sales revenue of Host Marriott Financial Trust is 12550, the net income is 56, the earnings per share are 0.04, the dividend is 0.1, while the outstanding shares in the market are 726700. On the other hand the apple's financial position is though strong and having the leading market shares in Unites States of America. The current sales revenue of the apple is 35323, the net income of apple is 6900, the earnings per share is 7.47, the dividend is 3.05 while the outstanding shares in the market are 21,130,785.

Now let's assuming apple without acquiring Host Marriott Financial Trust, the financial position of apple on the basis of the above five synergies is as follows.

Apple Inc

Revenue

35323

Net Income

6900

Earnings per Share

7.47

Price to earnings ratio

35.02

Number of Shares Outstanding

21130785

Host Marriott Financial Trust

Revenue

12550

Net Income

560

Earnings per Share

0.04

Price to earnings ratio

15.19

Number of Shares Outstanding

726700

After acquiring the firm of Host Marriott Financial Trust the Apple will have following market position.

Apple

Host Marriott Financial Trust

Revenue

35323

12550

47873

Net Income

6900

560

7460

Earnings per Share

7.47

0.04

7.51

Price to earnings ratio

35.02

15.19

50.21

Number of Shares Outstanding

21130785

726700

21857485

Goodwill is actually an expansive part of the attention paid from an acquirer to a target firm. Give or take 66 percent of securing costs speak to the abundance of attention paid to a target firm over the target company's book value of equity. Securing firms have been hesitant to utilize buy accounting since it needed to distinguish a material measure of acquired goodwill that might lessen future income when amortized. Therefore, if buy accounting was connected, there was tremendous twelve-month goodwill amortization ensuing to the business syntheses, and frequently a reported net misfortune emulating the combination. The span of target firms and the accounting technique essentially influence the cost being offered. It has been noted that the relative size of a focus to an acquirer is contrarily related with the offer value in light of the fact that an acquirer is unwilling to utilize voting normal stock to obtain a substantial target firm similarly, present exact confirmation that, different things being equivalent, the ...