you will assume the role of Chief Financial Officer of Monsanto Corporation. Bayer is considering a bid for United States seed company Monsanto. Assume that relevant tax rate is 35%. EBIT, depreciation, capital spending, and the change in net working capital will grow at the same rate as sales, which is expected to grow at a rate of 3% across the current year, while capital investment will remain stable. Assume that operational results quoted outside of Tables 4, 5 and 6 (income statement, balance sheet, and statement of cash flows, below), are interim measures to be used for purposes of your calculations.

Based on the proposal's likely effect on shareholder value, determine whether to accept or reject this proposal for $62B, using evidence provided here in Tables 1 through 6, to support your analyses. Evaluate each of the following:

1. Whether to accept or reject this proposal, using evidence drawn from ratio analysis, and time and trend analysis and other evidence from assigned readings covered in Modules One through Three to support your determinations. Compute and include two ratios per each of the four main areas of ratio analysis, including short-term solvency, asset utilization, long-term solvency, and profitability.
2. Evaluate limitations that may exist in using these varieties of analysis to make this determination.

  

 

 

  

Monsanto Co. 2015 (Bloomberg Market Rates) MON:US Current Price Open Day Range Volume Previous Close 52 Week Range 1 Year Return YTD Return Current P/E Ratio (TTM) Earnings Per Share (USD) (TTM) Market Cap (B USD) Shares Outstanding Price/Sales (TTM) Dividend Indicated Gross Yield Sector Industry Sub-Industry 106.00 (USD) 106.80 Table 3. Monsanto Co. Rates 109.69-109.54 18,049,774 106 81.22-120 -7.06% 10.94% 23.67 4.62 47.747 436.845 3.65 1.98% Materials Chemicals Agricultural Chemicals