"You are assigned to lead an acquisition team designed to introduce diversity into your corporation's product portfolio. Your core business is a major food distributor. The company you are considering acquiring was founded six years ago and is a small privately held technology company with a modest, essentially single product entry into an emerging technology. Though there may be some compatibility between your core business and that of the acquired firm, the nexus is not clearly developed and probably at least five years away.
-sales have risen at an average of 20% a year.
- Return on sales has averaged 26% for the past three years, after three years of looses.
- earnings have averaged 1,200,000 since the company was founded.
The Company's current ratio is 2.6 to 1 ; the industry standard is not clearly established.
The firms net worth is just over 2,000,000

a. As you study this acquisition, identify and comment on the critical, strategic factors and problems you would want to explore in an attempt to ensure a successul acquisition.

b. Are you fully satisfied with the comapny's ability to generate sufficent working capital why?

c. What do you think the purchase price should be if you were to acquire the firm? Document why you arrived at that valuation. "