Betcher Chiropractic

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Chiropractic Business Plan

Financial Plan

The following sections will outline important financial information.

7.1 Important Assumptions

The following table details important Financial Assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Projected Cash Flow

The following chart and table will indicate Projected Cash Flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $9,156 $30,044 $34,759
Cash from Receivables $18,697 $70,124 $99,762
Subtotal Cash from Operations $27,853 $100,168 $134,521
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $27,853 $100,168 $134,521
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $34,500 $54,400 $64,400
Bill Payments $28,678 $45,596 $50,229
Subtotal Spent on Operations $63,178 $99,996 $114,629
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $3,036 $2,783 $2,783
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $66,214 $102,779 $117,412
Net Cash Flow ($38,361) ($2,611) $17,109
Cash Balance $2,639 $28 $17,138

7.3 Break-even Analysis

The Break-even Analysis indicates what is needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $5,685
Assumptions:
Average Percent Variable Cost 3%
Estimated Monthly Fixed Cost $5,527

7.4 Projected Profit and Loss

The following table will indicate Projected Profit and Loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $36,622 $120,175 $139,038
Direct Cost of Sales $1,017 $3,338 $3,862
Other $0 $0 $0
Total Cost of Sales $1,017 $3,338 $3,862
Gross Margin $35,605 $116,837 $135,176
Gross Margin % 97.22% 97.22% 97.22%
Expenses
Payroll $34,500 $54,400 $64,400
Sales and Marketing and Other Expenses $3,520 $4,010 $4,180
Depreciation $3,000 $3,000 $3,000
Utilities (all) $3,300 $3,900 $4,000
Insurance - malpractice $1,210 $1,530 $1,550
Insurance - workers comp $220 $260 $260
Insurance - liability $2,200 $2,600 $2,600
Rent $13,200 $15,600 $16,000
Payroll Taxes $5,175 $8,160 $9,660
Total Operating Expenses $66,325 $93,460 $105,650
Profit Before Interest and Taxes ($30,720) $23,377 $29,526
EBITDA ($27,720) $26,377 $32,526
Interest Expense $1,836 $1,557 $1,279
Taxes Incurred $0 $5,455 $7,179
Net Profit ($32,556) $16,365 $21,067
Net Profit/Sales -88.90% 13.62% 15.15%

7.5 Projected Balance Sheet

The following table will indicate the Projected Balance Sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $2,639 $28 $17,138
Accounts Receivable $8,769 $28,776 $33,293
Other Current Assets $2,500 $2,500 $2,500
Total Current Assets $13,908 $31,305 $52,931
Long-term Assets
Long-term Assets $15,000 $15,000 $15,000
Accumulated Depreciation $3,000 $6,000 $9,000
Total Long-term Assets $12,000 $9,000 $6,000
Total Assets $25,908 $40,305 $58,931
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,000 $3,815 $4,156
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,000 $3,815 $4,156
Long-term Liabilities $16,964 $14,181 $11,398
Total Liabilities $19,964 $17,996 $15,554
Paid-in Capital $60,000 $60,000 $60,000
Retained Earnings ($21,500) ($54,056) ($37,691)
Earnings ($32,556) $16,365 $21,067
Total Capital $5,944 $22,309 $43,376
Total Liabilities and Capital $25,908 $40,305 $58,931
Net Worth $5,944 $22,309 $43,376

7.6 Business Ratios

The following table outlines some of the more important ratios from the Office of Chiropractors industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 8041.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 228.15% 15.70% 5.93%
Percent of Total Assets
Accounts Receivable 33.85% 71.40% 56.50% 21.14%
Other Current Assets 9.65% 6.20% 4.24% 45.36%
Total Current Assets 53.68% 77.67% 89.82% 71.11%
Long-term Assets 46.32% 22.33% 10.18% 28.89%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 11.58% 9.46% 7.05% 29.10%
Long-term Liabilities 65.48% 35.18% 19.34% 19.50%
Total Liabilities 77.06% 44.65% 26.39% 48.60%
Net Worth 22.94% 55.35% 73.61% 51.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 97.22% 97.22% 97.22% 100.00%
Selling, General & Administrative Expenses 187.02% 84.16% 82.76% 75.10%
Advertising Expenses 3.00% 1.00% 0.86% 0.61%
Profit Before Interest and Taxes -83.88% 19.45% 21.24% 3.98%
Main Ratios
Current 4.64 8.21 12.73 1.86
Quick 4.64 8.21 12.73 1.38
Total Debt to Total Assets 77.06% 44.65% 26.39% 10.80%
Pre-tax Return on Net Worth -547.68% 97.81% 65.12% 60.83%
Pre-tax Return on Assets -125.66% 54.14% 47.93% 27.59%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -88.90% 13.62% 15.15% n.a
Return on Equity -547.68% 73.35% 48.57% n.a
Activity Ratios
Accounts Receivable Turnover 3.13 3.13 3.13 n.a
Collection Days 55 76 109 n.a
Accounts Payable Turnover 10.56 12.17 12.17 n.a
Payment Days 27 27 29 n.a
Total Asset Turnover 1.41 2.98 2.36 n.a
Debt Ratios
Debt to Net Worth 3.36 0.81 0.36 n.a
Current Liab. to Liab. 0.15 0.21 0.27 n.a
Liquidity Ratios
Net Working Capital $10,908 $27,490 $48,774 n.a
Interest Coverage -16.74 15.01 23.09 n.a
Additional Ratios
Assets to Sales 0.71 0.34 0.42 n.a
Current Debt/Total Assets 12% 9% 7% n.a
Acid Test 1.71 0.66 4.72 n.a
Sales/Net Worth 6.16 5.39 3.21 n.a
Dividend Payout 0.00 0.00 0.00 n.a