Location: Nampa, ID
Greenhurst Nursery and Garden Center is located in Nampa, Idaho, and was listed for sale on Biz Buy Sale. This company focuses on selling plants and garden accessories.
The spreadsheet is formulated so that revenue, expenses, days of inventory, receivables, and payables can all be adjusted. The inputs flow through the spreadsheet to WACC and IRR. Most potential variables within the company are adjustable in this spreadsheet. The inputs in the forecast and bankrupt tabs are not linked. If you change inputs in one tab, you must also put them in the other tab to compare the bankrupt scenario with the same inputs.
We currently forecast a WACC of 11.1%, and an IRR or 11.33%. This means that the company has a return that will satisfy both equity and debt holders. We also forecast common stock at $150,000 and a mortgage loan of $300,000, making the debt/equity ratio at 1.84.
The bankrupt tab shows what would happen if the company filed bankruptcy due to lack of sales. The expected IRR of the debt holders are calculated. The expected “On the Dollar” return is calculated from expected values of the monetary assets sold to pay back the debt holders. With the forecasted expected sales of 1,000 items, the mortgage holder obtains a total of $206,030, or rather 76 cents on the dollar. There is currently no bank loan other than the mortgage, but the spreadsheet is set up to calculate other loans if needed.