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    Srinivas Kannan
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    Cisco acquired another company on May 5, 2000 for a purchase price of $5.763 billion. The market capitalization of the acquired company was $4.941 billion on the acquisition date. The difference between the purchase price and market capitalization results in goodwill of $5.602 billion on Cisco's balance sheet. The acquisition was accounted for using the purchase method, which records goodwill for the amount paid over the fair value of net assets acquired.

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    Cisco acquired another company on May 5, 2000 for a purchase price of $5.763 billion. The market capitalization of the acquired company was $4.941 billion on the acquisition date. The difference between the purchase price and market capitalization results in goodwill of $5.602 billion on Cisco's balance sheet. The acquisition was accounted for using the purchase method, which records goodwill for the amount paid over the fair value of net assets acquired.

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    10 views2 pages

    Cisco & Arrow

    Uploaded by

    Srinivas Kannan
    Cisco acquired another company on May 5, 2000 for a purchase price of $5.763 billion. The market capitalization of the acquired company was $4.941 billion on the acquisition date. The difference between the purchase price and market capitalization results in goodwill of $5.602 billion on Cisco's balance sheet. The acquisition was accounted for using the purchase method, which records goodwill for the amount paid over the fair value of net assets acquired.

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    Attribution Non-Commercial (BY-NC)
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    of 2

    Purchase Price Calculation

    Market Cap on May 3, 2000


    3,600,000,000
    Share price on 03/05/2000
    102
    Number of Shares
    35,294,118
    Number of Shares issued in Cisco
    74,887,059
    Value of the shares issued
    4,764,689,118
    Converted Options
    999,000,000
    PB Ratio
    22.22222222
    Balance Sheet of Cisco as at May 5, 2000

    B
    A+B

    A
    B

    C
    A+B+C

    Purchase Price Allocation


    Purchase Price as per Case
    5,763,689,118
    Share price on 05/05/2000
    140
    Market Cap on May 5, 2000
    4,941,176,471
    Net Assets
    162,000,000
    Goodwill
    5,601,689,118 5,605,689,118 Less Inventory Write off

    Balance Sheet of Cisco as at May 5, 2000

    29.41166122
    Purchase Method

    Pooling of Int

    Purchase

    Pooling of Int

    Inv Write off

    Cash & Cash Equivalents


    Accounts Receivable
    Inventory
    Other Current Assets

    4,840
    1,930
    882
    1,627

    4,840
    1,930
    878
    1,627

    4,840
    1,930
    882
    1,627

    Total Current Assets

    9,279

    9,275

    9,279

    Investment Net
    PPE
    Goodwill & other Intangiles
    Other Assets

    11,589
    1,159
    8,816
    1,050

    11,589
    1,159
    8,820
    1,050

    11,589
    1,159
    3214
    1,050

    Total Non Current Assets

    22,614

    22,618

    17,012

    Total Assets

    31,893

    31,893

    26,291

    Accounts Payable
    Other current liabilities

    600
    4508

    600
    4508

    600
    4508

    Total Current Liabilities

    5108

    5108

    5108

    995

    995

    995

    Preferred Stock
    Common Stock
    Retained Earnings
    Other Comprehensive Income

    16,465
    7,624
    1,701

    16,465
    7,624
    1,701

    10,923
    7,564
    1,701

    Total Equity

    25,790

    25,790

    20,188

    Total Liabilities

    31,893

    31,893

    26,291

    Other liabilities

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