Jet2 Task 3 Summary Report

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JET2- Financial Analysis TASK 3 Jan, 2014 Competition Bikes Summary Report for Expansion Financial Analysis Task 3 Competition Bikes is looking to expand to speed up its growth at a faster pace than can be achieved within the current facilities. The company has researched and found a perspective “like” company to buy or merge with to achieve this goal. The company, Canadian Biking, is a much smaller company, but has very similar product and would fit well into the current plan for their product mix and distribution points, adding a facility in Canada to their current United States facilities. Canadian Biking’s revenues are currently running at about 20% of Competition Bikes, making it a 20% possible sales revenue gain instantaneously, and allowing a broader sales base to absorb expenses and turn in a net better Earnings Per Share through efficiency gains at the higher revenues. As with any major move in planning the future of a company, all purchases, any sell-offs, possible acquisitions, and any mergers must be thoroughly and meticulously analyzed for their impact and net value to the bottom line shareholders. Competition Bikes has located the Canada based Canadian Bikes and verified its fit and performance history. The prior year performance for Canadian Bikes delivered almost four times the earnings per share as Competition Bikes delivered to their shareholders for Year 8, which is impressive and leads them to believe they can also learn better ways to produce their current products and reduce expenses from this newly acquired company. The capital that must be raised to purchase Canadian Bikes is roughly $600,000. This report will review and summarize all of the possible options for joining Competition Bikes and Canadian Bikes, including merging vs. buying, leasing vs. buying, and all possible combinations of raising the capital through a

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