The Impact of Acquisition on Firms Financial Performance (A Case Study of Total Petroleum Ghana LTD)

Abstract

This work evaluates the impact of Acquisition on Firms’ Financial Performance. That is a case study of Total Petroleum Ghana. Acquisition is a corporate strategy by which companies take over other company without necessarily buying the other company. The main reasons behind this study were to assess Pre and Post-Acquisition liquidity of total petroleum Ghana, and also to determine the Pre and post-Acquisition profitability of total petroleum Ghana. Moreover to evaluate Pre and Post-Acquisition asset utilization of total petroleum Ghana Company Limited. The results of the findings show that in terms of liquidity, there was a significant impact of the acquisition on the performance. Post-acquisition liquidity ratios indicated significantly higher performance. Moreover, for the profitability and assets utilization, the pre-acquisition performances were better than the four years of the post-acquisition period, though these differences were statistically insignificant. By making references to the findings it can be concluded that the acquisition of Mobil oil by Total petroleum has not been profitable to the company within the first four years. This work recommends that management of the company need to pay more attention on the external environment.

Keywords: Acquisition, Petroleum, Profitability, Performance, Firms

DOI: 10.7176/EJBM/12-30-08

Publication date:October 31^st 2020