Baldwin Bicycle Company

Problem identified Baldwin Bicycle Company (Baldwin or the Company), a small mid-market rise manufacturer, had a private trail opportunity with Hi- Valu Stores, Inc. ( Hi- Valu), which operated discount violate chain stores in the Northwest. Baldwin had to provoke a decision whether to propose back the Hi-Valus contender rent or not. To make an inform decision, the partnership should exam a blending of fiscal, marketing, and strategic implications of the rivalry demand. Financial out strain Current financial office With an annual ROA of 3.15% in 1988, Baldwins on-going financial situation is not favorable at all ( identify register 3 for dimension analysis). premier(prenominal) of all, the society had poor pluss management. The last inventories and accounts receivables, which account for 62% and 31% respectively of total current assets, substantially vitiate the financial liquidity ( find let out 4 -balance sheet). As the currency ratio is merely 9.83% (see adjoin 3), the alliance is extremely gyp of capital flow and at the hazard of illiquidity. The low arsenal overthrow of 2.9 times per year signals that the localize should take footprint to modify its asset management (see exhibit 3). Furthermore, the company is veneering a high risk of insolvency in the future callable to its super leveraged financial support. The high Debt to Equity ratio of 1.6 may be a barrier for further financing at a valid personify (see exhibit 3). Besides, the companys profitability is not promising at all. The annual dispel on sales of 2.49% provides the company diminutive room for growing (see exhibit 3).

Return on equity, operate by the low asset turnover, low return on sales and high D/E ratio, is flash comp ard to the cost of funds. Challenger deal profit analysis (see exhibit 1) The Challenger deal will bring an supernumerary $577,250 contribution boundary line to Baldwin. Selling at $92.29/unit, the Challenger... None of the attachments are connected to this essay, so you cant see how the author arrived at the numbers. A definite deficiency. If you cant explain how you got the numbers, whats the base on balls word? If you want to foil a full essay, order it on our website: Ordercustompaper.com

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