Accounting Ratios

Number of Acquisitions Last 5yrs


We penalise companies which have made more than three or more acquisitions in the past five years. Around 74% of all listed companies have made at least one acquisition in the past five years, with the US and Canada recording the highest incidence rate at 86%, with Chile and Russia the lowest at around 20%. Around 34% of companies have made acquisitions in each of the past five years. This red flag should be used in combination with acquisition consideration and deferred tax assets. A combination of these three suggests the possibility of profit manipulation.