Location: New Hartford, NY
Whims-n-Doodles is a company that is located in New Hartford, New York. They sell baby-related items such as strollers, clothes, furniture, and baby accessories. They have two forms of revenue coming from their online store and a store located in a strip mall. The asking price for the company is $99,000.
Whims-n-Doodles sells products that are high quality and environmentally friendly. Over the past few years, they have built a great reputation with moms and kids. They have more than 12,000 likes on Facebook and many followers on Pinterest and Twitter.
The company currently has a lease on a strip mall location of around 8,000 square feet. This makes the cost of capital have a lower rate and causes the company to have more equity than debt. However, in order to evaluate the company, a forecast was used where the building was purchased with a mortgage with a value of $600,000. This changed the debt and equity to 80% debt and 20% equity and the rate of return with those figures comes to a total of 8.64% under the current market.
With changing those factors in the forecast model, the price of the company would have to be more. The value of the company with the building is $425,000. The asking price mentioned above is where it should be with a building that is leased.
Another forecast was made to include a possible bankruptcy within six years. This was done to show the drastic difference between a good scenario and a bad one. An option of expanding the building was also calculated to take place in four years. These are all the different scenarios that were accounted for in the forecast.