Income Statement M&A Adjustments

This problem tests whether you understand how an acquisition changes reported earnings after combining two businesses. In an M&A model, candidates need to think through how purchase accounting, financing choices, synergies, one-time deal costs, and changes in the capital structure flow through revenue, expenses, interest, taxes, and ultimately EPS. Interviewers ask this because it checks both accounting judgment and the ability to connect deal assumptions to the pro forma income statement.