m ENTR2262 Assignment 2 - The Grande General Store, Est. 1948 It's Time to Sell Three generations of Grandes have dedicated their lives and careers to a small general store located in Spruce Grove. Rocky and Anita Grande, the current owner-operators, have decided to sell the family business. They have declared themselves "tired, burned out, and ready to get out". Their two adult children have no interest in the business, and Rocky and Anita want to spend more time with their three young grandchildren. They need help with setting a fair price for the business, with finding a qualified buyer, and with preparing a business prospectus for their sale. The Grandes want the highest price possible and at the same time sincerely wish to see the business survive. It has been in the family a long time, is a well- established part of the community, and has a dedicated workforce. Most of the employees have been with the company for more than ten years. The Grandes will allow a buyer to continue to use the family/business name if desired. What began as an old-fashioned general store (1940s-1960s) carrying everything from food and clothing, to tools, farm supplies, penny candy, and train tickets evolved into a traditional hardware store (1970s-present). The current 4,200 square feet of floor space is divided into four major departments: lawn and garden, paints, electrical and plumbing and general hardware. Sales and profits are divided equally between consumers and contractors. The store is located adjacent to a railroad siding with a storage building that allows for large shipments of merchandise to be received, stored, and sold. Building materials of all types (lumber, roofing, siding, Sheetrock, and so on) are picked up and delivered to local construction sites, which represent the mainstay of the contractor business. The Grande family is well respected. Their honesty, loyalty, hard work, and community involvement have come back to bless them on many occasions. During tough economic times, suppliers often extend credit terms far beyond the norm. Customers and contractors are fiercely loyal to the Grande's business even with the presence of modern-day giant warehouse outlets that offer a wider variety of the same product for less money. While the main buildings date back to 1948, the Grandes have upgraded their fleet of delivery trucks and forklifts. The inside of the store is a mix of the old and the new. State-of-the-art computers, paint processing equipment, and landscape machinery rentals are scattered around the old wooden building that still sports some original display fixtures and the wormy chestnut paneling that Rocky's grandfather, Jeb, installed during construction of the original building. The principles have compiled the following summary financials for the past five years of operations. Income (Profit and Loss) Statement Summary: 2015 - 2019 (in 000s) 2015 2016 2017 Sales $1,100 $1,215 $1,500 2018 2019 $1,800 $2,200 CGS-Cost of Goods Sold 550 600 732 822 995 GM - Gross Margin 550 615 768 978 1,205 2015 2016 2017 2018 2019 500 520 600 720 795 Operating Expenses Net Income before Taxes 50 95 168 258 410 Taxes 15 29 50 77 123 Net Income $ 35 $ 66 $ 118 $ 181 $ 287 Net Cash Flow from Operations: 2015 - 2019 (in 000s) Cash in $1,014 $1,098 $1,360 $1,617 $1,996 Cash out 945 1,014 1,250 1,430 1,760 Net Cash Flow - Operations $ 69 $ 84 $ 110 $ 187 $ 236 - $ 23 $ 21 Balance Sheet Summary: January 1, 2015 - 2019 (in 000s) Cash $ 12 $ 19 $ 22 Inventory 41 47 59 Accounts Receivables 80 102 124 65 80 148 187 Land 35 35 35 35 35 Buildings 612 567 505 459 414 84 190 171 241 214 Equipment Accounts Payables Notes Payables 36 46 51 61 71 21 6 7 9 6 Long-Term Debt 121 225 211 278 261 Owner's Equity 686 683 647 623 613 Spruce Grove is considered a moderate-to-high growth region of the province and is projected to stay that way for years to come. New housing, new neighborhoods, new schools, new malls, and the like are under construction and in the planning stages throughout the area, The Grande business sits on seven acres of land and includes room for growth, in terms of new buildings, increased parking, and other business options. The business was recently appraised by certified professionals. The assessed values are as follows: The Grande business sits on seven acres of land and includes room for growth, in terms of new buildings, increased parking, and other business options. The business was recently appraised by certified professionals. The assessed values are as follows: Land $110,000 Buildings 515,000 Equipment 155,000 Inventory 70,000 Total Current Assessed Value $850,000 a The Grandes need to compile the data into a prospectus. They also need to establish an asking price. Two local area banks have indicated a willingness to offer a 15-year note to a qualified buyer for a maximum of $624,000 (which represents 80 percent of the assessed value of the land, buildings and equipment). The business prospectus will be 5 pages including a cover page containing the names of the group members, an appropriate title, and word count. There is no maximum word count required just the 5 pages described. Supporting research documentation is encouraged. Appropriate graphics are expected (at least 3 to be used). Graphics include pictures, charts, graphs, or diagrams. References will be included in text and on a reference page but not included in the page count. It will contain the following: Benefits to the buyer, and | m ENTR2262 Assignment 2 - The Grande General Store, Est. 1948 It's Time to Sell Three generations of Grandes have dedicated their lives and careers to a small general store located in Spruce Grove. Rocky and Anita Grande, the current owner-operators, have decided to sell the family business. They have declared themselves "tired, burned out, and ready to get out". Their two adult children have no interest in the business, and Rocky and Anita want to spend more time with their three young grandchildren. They need help with setting a fair price for the business, with finding a qualified buyer, and with preparing a business prospectus for their sale. The Grandes want the highest price possible and at the same time sincerely wish to see the business survive. It has been in the family a long time, is a well- established part of the community, and has a dedicated workforce. Most of the employees have been with the company for more than ten years. The Grandes will allow a buyer to continue to use the family/business name if desired. What began as an old-fashioned general store (1940s-1960s) carrying everything from food and clothing, to tools, farm supplies, penny candy, and train tickets evolved into a traditional hardware store (1970s-present). The current 4,200 square feet of floor space is divided into four major departments: lawn and garden, paints, electrical and plumbing and general hardware. Sales and profits are divided equally between consumers and contractors. The store is located adjacent to a railroad siding with a storage building that allows for large shipments of merchandise to be received, stored, and sold. Building materials of all types (lumber, roofing, siding, Sheetrock, and so on) are picked up and delivered to local construction sites, which represent the mainstay of the contractor business. The Grande family is well respected. Their honesty, loyalty, hard work, and community involvement have come back to bless them on many occasions. During tough economic times, suppliers often extend credit terms far beyond the norm. Customers and contractors are fiercely loyal to the Grande's business even with the presence of modern-day giant warehouse outlets that offer a wider variety of the same product for less money. While the main buildings date back to 1948, the Grandes have upgraded their fleet of delivery trucks and forklifts. The inside of the store is a mix of the old and the new. State-of-the-art computers, paint processing equipment, and landscape machinery rentals are scattered around the old wooden building that still sports some original display fixtures and the wormy chestnut paneling that Rocky's grandfather, Jeb, installed during construction of the original building. The principles have compiled the following summary financials for the past five years of operations. Income (Profit and Loss) Statement Summary: 2015 - 2019 (in 000s) 2015 2016 2017 Sales $1,100 $1,215 $1,500 2018 2019 $1,800 $2,200 CGS-Cost of Goods Sold 550 600 732 822 995 GM - Gross Margin 550 615 768 978 1,205 2015 2016 2017 2018 2019 500 520 600 720 795 Operating Expenses Net Income before Taxes 50 95 168 258 410 Taxes 15 29 50 77 123 Net Income $ 35 $ 66 $ 118 $ 181 $ 287 Net Cash Flow from Operations: 2015 - 2019 (in 000s) Cash in $1,014 $1,098 $1,360 $1,617 $1,996 Cash out 945 1,014 1,250 1,430 1,760 Net Cash Flow - Operations $ 69 $ 84 $ 110 $ 187 $ 236 - $ 23 $ 21 Balance Sheet Summary: January 1, 2015 - 2019 (in 000s) Cash $ 12 $ 19 $ 22 Inventory 41 47 59 Accounts Receivables 80 102 124 65 80 148 187 Land 35 35 35 35 35 Buildings 612 567 505 459 414 84 190 171 241 214 Equipment Accounts Payables Notes Payables 36 46 51 61 71 21 6 7 9 6 Long-Term Debt 121 225 211 278 261 Owner's Equity 686 683 647 623 613 Spruce Grove is considered a moderate-to-high growth region of the province and is projected to stay that way for years to come. New housing, new neighborhoods, new schools, new malls, and the like are under construction and in the planning stages throughout the area, The Grande business sits on seven acres of land and includes room for growth, in terms of new buildings, increased parking, and other business options. The business was recently appraised by certified professionals. The assessed values are as follows: The Grande business sits on seven acres of land and includes room for growth, in terms of new buildings, increased parking, and other business options. The business was recently appraised by certified professionals. The assessed values are as follows: Land $110,000 Buildings 515,000 Equipment 155,000 Inventory 70,000 Total Current Assessed Value $850,000 a The Grandes need to compile the data into a prospectus. They also need to establish an asking price. Two local area banks have indicated a willingness to offer a 15-year note to a qualified buyer for a maximum of $624,000 (which represents 80 percent of the assessed value of the land, buildings and equipment). The business prospectus will be 5 pages including a cover page containing the names of the group members, an appropriate title, and word count. There is no maximum word count required just the 5 pages described. Supporting research documentation is encouraged. Appropriate graphics are expected (at least 3 to be used). Graphics include pictures, charts, graphs, or diagrams. References will be included in text and on a reference page but not included in the page count. It will contain the following: Benefits to the buyer, and |