In taking over (merger or acquisition) another Company, you would check (best option) : 1) Profit & Loss 2) Assets 3) Net Worth 4) Liabilities

In my opinion the best option to check would be -3) Net Worth.

The reason is as follows :

 - Profit & Loss is a measure of the operational performance of the company only and the same can be improved upon after merger & acquisition when the management or ownership of the company is transferred to the purchaser. Hence it has less releveance at the time of merger or acquisition.

 - Assets only take into account what the Company owns but not what the Company has to Pay (Liabilities). Hence it has less releveance at the time of merger or acquisition.

 - Liabilities only take into account what the Company has to pay or owns to banks & borrowers. Hence it has less releveance at the time of merger or acquisition.

 - Net Worth is Assets minus Liabilities and is the true indicator of the value of the Company or its financial worth and health. Hence it is the most important parameter at the time of deciding the Merger or Acquisition.

I would check all of these along with what value the new merger will bring to our company... By missing one of these4 options, one cannot take a right decision in acquisition...