Location: Fort Collins, CO
Prima Bodywear is a small dance and exercise apparel store located in Fort Collins, CO. Prima Bodywear is the only full-service dance store north of Boulder, Colorado and south of Casper, Wyoming. Currently they have customers in Wyoming, Nebraska, Kansas, South Dakota and Colorado. They have expanded into yoga and exercise clothes in the past year and have created a state of the art website.
The attached spreadsheet model includes a pro forma income statement and balance sheet based on market assumptions in the area (cost of land, utilities, interest rates, etc). It also includes an analysis of the cost of capital and an internal rate of return for the store. The model shows the assumptions made about the business and allows for changes to be made to the model.
The weighted average cost of capital and the internal rate of return are approximately 12%. One of the biggest assumptions we made is that the business owns the land and building. This would lead one to believe that the selling price should be higher. But the advertisement for the sale says that the building is being leased so the asking price of $50,000 seems appropriate.
The forecast appears to show that things may start slow in the beginning but will pick up as time goes on, especially if the new exercise and yoga apparel appeal to customers and the website takes off. Based on these assumptions, this company can regularly produce income year in and year out.