Case 3 Lady M Confections- A Complete Guide / Case 3 Lady M Confections- A Complete Guide: Latest-2021, a complete document for exam

Zhongyuan Wu ACCTG 855 Case Assignment 3 The valuation and Financing of Lady M Confections Summary  Lady M confections had featured in Oprah magazine twice in one year. Many celebrities  Need to expand the brand to Asia and Middle East.  Offer =$10M line of credit to be exchange of equity stake in the company.  Offer = to include exclusive franchising rights in china for the investor.  Lady M considers opening a new boutique in the new WTC  Annual rent for the new location is $310,600  Have to make decision between the WTC location or the Chinese investor’s offer  Considering the break even analysis, profit and all as would relate to the benefit and the growth of the company.  The need to break even in one year Consider 1 Opening a new boutique at WTC in New York Lady M needs to break even at least. For year 1 Amounts in ($) Rent (Increased 3%) 310,600 Utilities (Increased 3%) 38,644 Labor cost (Increased 3%) 594,750 CGS (50% of gross sales) 943,994 Total (Gross sales) $1,887,998 Price per cake $80 Cakes sold per year 23,5999.9 =23,600 Average Cakes per day 64.65 =65 cakes Net income = gross sales – Total expenditure Total Expenditure = rent+ Utilities+ Labor+ COGS COGS = 50% gross sales Net income = 1,887,988 -1,887,998 = 0