Sola Retail Group — Expand or Sell Analysis

As of March 01, 2026 · Based on 19 months of financial data (Aug 2024 – Feb 2026)

DATA-DRIVEN RECOMMENDATION
🏗 EXPAND TO SECOND LOCATION
Sell signal: 12%
Expand signal: 88%

Business Health Snapshot

TTM Revenue
$1,223,329
TTM Net Income
$125,717
Net margin 10.3%
Cash on Hand
$231,407
Total Equity
$304,924
Cash Flow from Ops TTM
$152,994
Cash Control Health
93.9%
35 days short
MetricValueNotes
TTM Revenue$1,223,328.68Income_Statement.csv → TOTAL REVENUE, last 12 months sum
TTM Gross Profit$416,301.44Income_Statement.csv → GROSS PROFIT, last 12 months sum | margin = Gross ÷ Revenue
TTM Net Income$125,716.77Income_Statement.csv → NET INCOME, last 12 months sum | net margin = Net ÷ Revenue
TTM Cash from Operations$152,993.54Cash_Flow_Statement.csv → NET CASH FROM OPERATING ACTIVITIES, last 12 months sum
Last 3-Mo Avg Net Income$5,741.04Income_Statement.csv → NET INCOME, avg of last 3 months (Dec 2025 / Jan 2026 / Feb 2026)
Cash on Hand$231,407.38Balance_Sheet_Restated.csv → Cash and Cash Equivalents, Feb 2026 (latest month)
Total Equity (Net Worth)$304,923.57Balance_Sheet_Restated.csv → TOTAL EQUITY, Feb 2026 = Owner's Capital + Retained Earnings
Hotspot Revenue Trend+$1,396.55/monthHotspot_POS_System.csv → gross_sales grouped by month; slope = np.polyfit linear regression over all months
Retail Revenue Trend+$58.91/monthRetail_POS_System.csv → net_sales grouped by month; slope = np.polyfit linear regression over all months
Cash Control Health93.9%Daily_Deposit_Log.csv → over_short column | formula: (total days − shortage days) ÷ total days × 100 | 35 shortage days (over_short < 0) out of 577 total days
Shrinkage Loss (SP)$22,415.00Sum of loss_sp TOTAL rows: Retail ($0) + Hotspot ($17,260) + Lottery ($5,155) from Inventory Reconciliation CSVs in outputs folder
Avg Monthly Payroll$21,289.77Payroll_Records.csv → gross_pay + benefits + payroll_tax summed per day, grouped by month, then averaged across all months | ~5 unique employees/month
Monthly Rent$2,500.00Rent_Invoices.csv → monthly_rent_amount column, first row (fixed flat rate, same every month)
Avg Monthly Utilities$927.75Utility_Bills.csv → amount grouped by month then averaged (absolute value; original values stored as negative)

Sell Analysis — What Is the Business Worth?

SDE
$177,717
Net Income + Withdrawals
Valuation (SDE 2.5x)
$444,292
Mid-range
Valuation (Asset)
$473,425
Net Asset Value
Recommended Ask
$444,292–$533,150
Triangulated range
Buyer Gets (Tangibles)
$237,620
Cash + Inventory
Inventory Value
$6,213
At cost (book)
MetricValueNotes
Seller's Discretionary Earnings (SDE)$177,716.77Formula: TTM Net Income ($125,716.77) + TTM Owner Withdrawals added back ($52,000.00) | Withdrawals from Cash_Flow_Statement.csv → Owner Withdrawals, last 12 months sum (abs value)
Valuation — SDE 2.0x (Low)$355,433.54Formula: SDE ($177,716.77) × 2.0 | Conservative floor for small retail businesses
Valuation — SDE 2.5x (Mid)$444,291.92Formula: SDE × 2.5 | Typical multiple for retail/service businesses with stable revenue
Valuation — SDE 3.0x (High)$533,150.31Formula: SDE × 3.0 | Premium multiple for clean books, growing revenue, low debt
Valuation — Asset-Based$473,424.57Formula: Total Assets ($479,276.71) − Total Liabilities ($5,852.14) | Source: Balance_Sheet_Restated.csv, Feb 2026
Valuation — Revenue 0.5x$611,664.34Formula: TTM Revenue ($1,223,328.68) × 0.5 | Sanity-check method; typical range 0.3x–0.7x for small retail
── RECOMMENDED ASKING RANGE ──$444,292 – $533,150Formula: low = max(SDE×2.5, Asset×0.9) = $444,292 | high = max(SDE×3.0, Asset) = $533,150 | Asset-based dominates here because Balance Sheet is strong
Buyer Gets: Cash$231,407.38Balance_Sheet_Restated.csv → Cash and Cash Equivalents, Feb 2026
Buyer Gets: Inventory$6,213.00Balance_Sheet_Restated.csv → Hotspot Voucher Inventory ($6,213.00) + Retail Merchandise Inventory ($0.00), Feb 2026, at cost
Buyer Gets: Total Tangibles$237,620.38Formula: Cash ($231,407.38) + Inventory ($6,213.00)
Shrinkage to Disclose$22,415.00Sum of loss_sp TOTAL rows: Retail ($0) + Hotspot ($17,260) + Lottery ($5,155) from Inventory Reconciliation CSVs — already restated in Balance Sheet

Expand Analysis — Can the Business Support a Second Location?

Available Cash
$164,449
After 3-mo reserve
Capital Needed
$445,000
Startup + Inventory
Self-Fund?
NO — $280,551 gap
22.0 months away
DSCR
2.65x
≥1.25 = bankable
Loc2 Est. Monthly Net
$1,998
Break-Even
75.1 months
Startup cost recovery
MetricValueNotes
Safety Reserve$66,957.92Formula: Avg monthly OpEx ($22,319.31) × 3 months | Source: Income_Statement.csv → TOTAL OPERATING EXPENSES, all-months average
Available Cash$164,449.46Formula: Cash on Hand ($231,407.38) − Safety Reserve ($66,957.92)
Startup Cost (Loc 2)$150,000.00Assumption constant in Block 1 (EXPANSION_STARTUP_COST) — covers fit-out, licenses, equipment. Edit in Block 1 if you have a real quote.
Inventory Needed (Loc 2)$295,000.00Assumption constant in Block 1 (EXPANSION_INVENTORY_NEEDED) — set at ~50% of current inventory book value ($6,213.00). Edit in Block 1.
Total Capital Needed$445,000.00Formula: Startup Cost ($150,000.00) + Inventory Needed ($295,000.00)
Self-Fund Possible?NO ⚠Test: Available Cash ($164,449.46) ≥ Total Capital Needed ($445,000.00) → FAIL
Self-Fund Gap$280,550.54Formula: max(0, Total Capital Needed − Available Cash) = max(0, $445,000.00 − $164,449.46)
Months to Accumulate Gap22.0Formula: Self-Fund Gap ($280,550.54) ÷ Avg monthly net CF from ops ($12,749.46) | Based on TTM average monthly cash generation
── LOAN OPTION ──
Loan Amount$200,000.00Assumption constant in Block 1 (LOAN_AMOUNT). Edit if applying for a different amount.
Monthly Payment$3,960.24Formula: standard amortization = P × [r(1+r)^n] ÷ [(1+r)^n − 1] | P=$200,000, r=0.00583/month, n=60 months
DSCR2.65xFormula: (TTM Operating Income ÷ 12) ÷ Monthly Loan Payment = ($125,716.77 ÷ 12) ÷ $3,960.24 | ≥1.25x = lender will typically approve
Loan Feasible?YES ✅Test: DSCR (2.65x) ≥ 1.25x threshold → PASS
── LOCATION 2 PROJECTIONS ──
Loc2 Monthly Revenue (est)$61,166.43Formula: (TTM Revenue ÷ 12) × ramp rate = ($1,223,328.68 ÷ 12) × 60% | Ramp rate set in Block 1 (EXPANSION_REVENUE_RAMP)
Loc2 Monthly Gross Profit$20,815.07Formula: Loc2 Monthly Revenue × Gross Margin % = $61,166.43 × 34.0% | Gross margin from TTM Income Statement
Loc2 Additional Fixed Costs$18,817.00Formula: Rent ($2,500) + Payroll ($15,000) + Utilities ($900) + Insurance ($417) | All assumption constants in Block 1
Loc2 Estimated Monthly Net$1,998.07Formula: Loc2 Gross Profit ($20,815.07) − Loc2 Fixed Costs ($18,817.00) | Does NOT include loan payments
Break-Even (months)75.1Formula: Startup Cost ($150,000.00) ÷ Loc2 Monthly Net ($1,998.07) | Months until Location 2 recoups its own startup cost
Combined Annual Net (est)$102,170.76Formula: (Loc1 monthly net + Loc2 monthly net − loan payment) × 12 | Loc1 avg = $10,476.40/mo, Loc2 est = $1,998.07/mo, loan pmt = $3,960.24

Action Plan — Path A: Sell the Business

1
Prepare the sale package
Compile: Income Statement, Cash Flow, Restated Balance Sheet, and all Inventory Reconciliation reports. These prove the business is transparent and well-managed.
2
Set the asking price
Lead with the asset-based value ($473,425). Your balance sheet is strong — don't undervalue by using only the SDE method. Recommended range: $444,292 – $533,150.
3
Disclose shrinkage proactively
Total shrinkage of $22,415.00 (SP) has already been reconciled and restated. Showing this upfront demonstrates honest books and will increase buyer confidence.
4
Engage a business broker
A broker specializing in retail/convenience can reach qualified buyers. Typical commission: 10%. Budget this into your net proceeds.
5
Negotiate floor price
Set your walk-away at $444,292 (2.5x SDE). The asset base supports holding firm above this number.

Action Plan — Path B: Expand to Second Location

1
Fix shrinkage controls first
Shrinkage at a single location is already $22,415.00 (SP). At 2 locations this doubles. Implement stricter inventory controls before scaling.
2
Fund the expansion
Cannot fully self-fund ($280,551 gap). Apply for a $200,000 loan — your DSCR of 2.6x is well above the 1.25x lender minimum. Monthly payment: $3,960.24.
3
Scout the second location
Target a location with similar demographics. Budget $150,000 for fit-out, licensing, and equipment.
4
Build out inventory
Stock Location 2 at ~50% of current levels ($295,000). Negotiate extended payment terms with suppliers to reduce cash strain.
5
Target break-even
Location 2 is projected to net $1,998/month. At this rate, startup costs recover in ~75 months. If performance is below 60% of Location 1, re-evaluate at month 6.