Case Study

Bicicleta Ferreira Limitada

6 pages
February 2007
Reference: IMD-3-1781

Bicicleta Ferreira, a Brazilian bicycle manufacturing company, is a family business with a relatively successful past and an uncertain future. A deal proposed by a major chain of department stores brings the family-dominated executive committee to the point of a decision regarding the future of the firm. The case requires a thorough analysis of the financial implications of the proposed deal, which must be then considered in conjunction with the strategic positioning of the company in the context of the Brazilian industry as a whole.

Learning Objective

Participants will have some hands-on practice in assessing a proposed deal from a financial and strategic standpoint. The financial information given lends itself to the calculation of a number of different measures including marginal costs, the total required investment, annual contributions, estimation of cost of capital, return on equity, breakeven analysis and financial leverage.

Keywords
Financial Analysis, Investment Appraisal, Manufacturing, Working Capital
Settings
Brazil
Early 2007
Type
Published Sources
Copyright
© 2007
Available Languages
English
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