DECODING SCALE AND SIZE OF THE ACQUIRED AND THE ACQUIRER: AN EMPIRICAL ANALYSIS

Purpose: Corporate performance is measured in terms of financial parameters. Firm`s operations always aimed towards achieving financial and other goals and fulfilling shareholder`s expectations. Growing organically is the test of patience which firm`s can hardly afford to, particularly in the light of sword-edged competition. Mergers and Acquisitions provide an inorganic tool which helps firms to race against time to achieve their objectives. The prime focus of this paper is to identify the determining characteristics that distinguishes Acquirers from Targets, and provide evidence to demonstrate whether firms are likely to be the acquirers or the targets. Methodology: Ratio analysis approach has been applied to judge level and scale of financial parameters taken from 3 broad categories namely, liquidity ratios, profitability ratios and capital structure ratios. Normality test was done by calculating mean, median, standard deviation, kurtosis and skewness by descriptive method as well as by K-S and S-W test. Data was found to be non-normal, therefore, application of nonparametric test was found to be more appropriate to analyse data of 20 sample firms. Statistical tools used to perform data analysis and hypothesis testing were: Mann Whiteney U-test, Two sample K-S test and Wilcoxon Signed Rank test. Correlation was performed to do proximity-test between acquirer and target. Findings and conclusions: Hypothesis testing at 5 % significance level provided evidence to conclude that Acquirers and Targets differ from each in terms of profitability only. There was no difference in liquidity position and Capital Structure position between acquirers and targets. Therefore, the study did not find any characteristic difference between acquirers and targets so far as Liquidity and Capital Structure position is concerned. Research Limitations: Only domestic mergers were taken as sample and size of sample was also small, making the generalization of outcomes rather limited. Generalization of outcomes may become more broad and wide in scope and more conclusive if further researchers employ large sample for analysis. Type: Research Paper Value: This research paper is original in content and has not been published or produced anywhere and on any literary/academic platform. Key words: Corporate performance, Financial parameters, Mergers and Acquisitions, Organically, etc.