The attached spreadsheet model is for Blumin’ Express, which is a floral shop located in Illinois. The model includes a forecasted income statement and balance sheet for the next ten years. We built our forecast based on market assumptions for floral shops in that area. We looked up the population for the area and how often people buy flowers. The model allows for the inputs to be changed to see how the company will do under different circumstances.
With the input values that we used, the company would have a NPV of $293,561 for the ten years. This is showing a positive cash flow over the ten years. There is a lot of room for growth with this business. A bigger building could be purchased to allow for more growth.
The proportion of debt for the company was less than 60%. This is great for someone who wants a business that doesn’t have to have a big line of credit. We based the interest rates on the rates for small business loans in the area. Based on our forecast, we think that purchasing this company would be a good buy.