Computer Geeks
Location:
Company Website:
For Sale Website:
Description:
Computer Geeks does it all: laptop and computer repair, networking, small business security systems, store point of sale systems, web hosting, remote support, retail sales, testing and more. The only reason why this business is being sold is because the owner is having an addition to the family and wants to spend more time with family.
We created a five year forecast for Computer Geeks which includes an income statement and a balance sheet. We used data given to us as well as external data from other reliable sources. This company would need about almost $100,000 to begin. This would include renting a building, buying inventory, and hiring employees.
WACC came out to be 17.11% which seems fairly high, but the returns on this company can handle it. After computing the ratios, NPV and IRR, of this company, it is in a very healthy stage and will continue to grow rapidly through the years.
The company’s net income would almost double from $212,000 in 2013 to $406,000 in 2017 with a high IRR of 215% and an NPV of $826,000.
| Assumptions: | ||
| According to US Census Bureau, city growing 14.6% annually | ||
| Revenue is average price * 1% of target area | ||
| Annual growth | 3% | |
| Legal setup | 300 | Online research |
| Quickbooks PRO | 300 | |
| Miscellenous | 300 | |
| Internet | 420 | Time Warner |
| Office space | 900 | Average of several similar office space |
| Depreciation | 4000 | $20,000 total asset cost over five year period |
| Tax Rate | 7.50% | Lakewood wesbite |
| Phone | 360 | Vonage |
| Business Loan Rate | 7.90% | Credit Union of Colorado |
The major issue this company faces (which is a good issue to have) is that it has too much cash on hand without enough liabilities.
This is a company that an investor would want to fund because of the great return, but in all honesty, this company does not need additional funding. However, this would be a great company to buy because of its high profit margin and recurring returns.