Business: Southwest USA Business Analysis

Assumptions

SDI (re-cast) $160,000 Inventory $ 5,000 F,F&E $ 45,000 Working Capital $ 2,000
Fair Mgr Sal $ 12,000
CapEx $ 3,000

Finance yrs 5
Interest rate 8.50%
% down payment 80%

Industry R Code 290
Q Score 1,061
Q Standard 825
Actual vs Standard 128.6%
Industry R Code 290
QR Score 373

Business Fundamentals(1-5) 1=low 5=high
Businessrecords 3
Seller Motivation 3
Location 3
Profit History 4
Asset Quality 5
Time to learn 4
Ind.Attractness 4

Asking Price $707,731
Expected Selling Price Range
Low $541,414
High $636,958
QR Score selling price $601,571

Inventory $ 5,000
FF&E $ 45,000
Goodwill/non-compete $551,571
Total Business Price $601,571

Recast Profits from Current operations $160,000
New Owner Salary ($12,000)
Other adjustments Capital Exp ($3,000)
Annual Debt Payments ($30,633)
Free cash flow (cash in excess of salary and debt service) $114,367
Coverage ratio(a) 4.73
BDI* Cash total (Salary + free cash) $126,367

Business Price (QM Price) $601,571
Working Capital $2,000
Total Project $603,571

Acquisition Price (includes Inv
& Work cap) $603,571
cash down% 80.00%
cash down $482,857
Debt % 20.00%
Debt amount $118,714
Debt Terms Years 5
APR 8.50%
Annual Debt Service ($30,633)

Equity Appreciation per year
(debt/years financed) $24,143
Salary + Cash in excess of debt service $126,367
Total return (includes salary, free cash $150,510
and Equity build up)
Return on Down Payment 31.17%
Investment ROI (Total return/Sell Price)25.02%

(a) Lenders require minimum 1.3
*Buyer's Descretionary Income

Seller Approval: ____________________________________
Date: _________________