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Predicting a Firm's FInancial Distress: The Merrill Lynch Co. Statement of Cash Flows

Danielle Morin; Julien Lemaux; Dominique Hamel;

商品編號:9B12B011
出版日期:2012/05/30
再版日期:2012/05/30
商品來源:Ivey
商品主題:Accounting; Finance
商品類型:Case (Library)
涵蓋議題:2008 financial crisis;prediction of banks' financial distress;cash flows statement analysis;Merrill Lynch dismissal;financial statements analysis;banks performance analysis
難易度:4 - Undergraduate/MBA
內容長度:14 頁
地域:United States
產業:Finance and Insurance;
事件年度:2008

During the night of September 14, 2008, a few hours before Lehman Brothers folded, Merrill Lynch declared defeat: it was acquired by Bank of America (BofA). Unsure of its ability to continue as a stand-alone entity, Merrill Lynch deliberately ended 90 years of independence. Before its buyout by BofA, Merrill Lynch was the world's largest and most widely recognized stockbroker. It dominated retail stockbroking with its army of 16,000 brokers around the world. At the start of 2008, Merrill Lynch, Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Stearns were the five largest stand-alone investment banks, with a combined total history of 549 years: within the span of six months, they would all be gone. Some observers wondered whether any early signs of the financial distress that the investment firm experienced in 2008 could be seen in the financial statements published in the years preceding the acquisition of this giant. In addition, was there value in evaluating the performance of the company from an angle other than that of operating results, which is typically used by financial analysts? Specifically would there be value in an assessment of the company's performance by scrutinizing the origin and use of its liquid assets for the years 2005, 2006 and 2007. Such an investigation has required focus on the statements of cash flows, including the need to: evaluate the cash situation at year-end;analyze cash flows provided (used) by operating activities;analyze cash flows provided (used) by investment activities;and, analyze cash flows provided (used) by financing activities.

教學手冊:8B12B011
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