Chiropractic Services Business Plan

Sports Chiropractic Center

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Financial Plan

The following is the financial plan for Sports Chiropractic.

7.1 Break-even Analysis

The monthly sales break-even point is shown in the following table and chart.

Break-even Analysis
Monthly Revenue Break-even $10,244
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $10,244

7.2 Projected Profit and Loss

The following is the projected profit and loss for three years.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $138,000 $151,800 $166,980
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $138,000 $151,800 $166,980
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $85,500 $101,000 $118,000
Sales and Marketing and Other Expenses $4,800 $5,000 $5,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $0 $0 $150
Insurance $1,800 $1,800 $1,800
Rent $18,000 $18,000 $1,800
Payroll Taxes $12,825 $15,150 $17,700
Other $0 $0 $0
Total Operating Expenses $122,925 $140,950 $144,450
Profit Before Interest and Taxes $15,075 $10,850 $22,530
EBITDA $15,075 $10,850 $22,530
Interest Expense $0 $0 $0
Taxes Incurred $4,523 $3,255 $6,759
Net Profit $10,553 $7,595 $15,771
Net Profit/Sales 7.65% 5.00% 9.44%

7.3 Projected Cash Flow

The following is the projected cash flow for three years.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $138,000 $151,800 $166,980
Subtotal Cash from Operations $138,000 $151,800 $166,980
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 $138,000 $151,800 $166,980
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $85,500 $101,000 $118,000
Bill Payments $37,914 $43,687 $34,031
Subtotal Spent on Operations $123,414 $144,687 $152,031
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 $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $123,414 $144,687 $152,031
Net Cash Flow $14,586 $7,113 $14,949
Cash Balance $39,486 $46,599 $61,548

7.4 Projected Balance Sheet

The following is the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $39,486 $46,599 $61,548
Other Current Assets $0 $0 $0
Total Current Assets $39,486 $46,599 $61,548
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $39,486 $46,599 $61,548
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,033 $3,551 $2,730
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,033 $3,551 $2,730
Long-term Liabilities $0 $0 $0
Total Liabilities $4,033 $3,551 $2,730
Paid-in Capital $45,000 $45,000 $45,000
Retained Earnings ($20,100) ($9,548) ($1,953)
Earnings $10,553 $7,595 $15,771
Total Capital $35,453 $43,048 $58,819
Total Liabilities and Capital $39,486 $46,599 $61,548
Net Worth $35,453 $43,048 $58,819

7.5 Business Ratios

The following table outlines some of the more important ratios from the Offices of Physicians industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 8011.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 10.00% 10.00% 5.90%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 50.50%
Total Current Assets 100.00% 100.00% 100.00% 60.80%
Long-term Assets 0.00% 0.00% 0.00% 39.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.21% 7.62% 4.43% 39.80%
Long-term Liabilities 0.00% 0.00% 0.00% 14.10%
Total Liabilities 10.21% 7.62% 4.43% 53.90%
Net Worth 89.79% 92.38% 95.57% 46.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 92.35% 95.00% 90.56% 57.10%
Advertising Expenses 3.48% 3.29% 2.99% 0.40%
Profit Before Interest and Taxes 10.92% 7.15% 13.49% 2.00%
Main Ratios
Current 9.79 13.12 22.55 1.37
Quick 9.79 13.12 22.55 1.12
Total Debt to Total Assets 10.21% 7.62% 4.43% 53.90%
Pre-tax Return on Net Worth 42.52% 25.20% 38.30% 6.90%
Pre-tax Return on Assets 38.18% 23.28% 36.61% 15.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.65% 5.00% 9.44% n.a
Return on Equity 29.77% 17.64% 26.81% n.a
Activity Ratios
Accounts Payable Turnover 10.40 12.17 12.17 n.a
Payment Days 27 32 35 n.a
Total Asset Turnover 3.49 3.26 2.71 n.a
Debt Ratios
Debt to Net Worth 0.11 0.08 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $35,453 $43,048 $58,819 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.29 0.31 0.37 n.a
Current Debt/Total Assets 10% 8% 4% n.a
Acid Test 9.79 13.12 22.55 n.a
Sales/Net Worth 3.89 3.53 2.84 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Break-even Analysis
Monthly Revenue Break-even $10,244
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $10,244
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $138,000 $151,800 $166,980
Direct Cost of Sales $0 $0 $0
Other Production Expenses $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $138,000 $151,800 $166,980
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $85,500 $101,000 $118,000
Sales and Marketing and Other Expenses $4,800 $5,000 $5,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $0 $0 $150
Insurance $1,800 $1,800 $1,800
Rent $18,000 $18,000 $1,800
Payroll Taxes $12,825 $15,150 $17,700
Other $0 $0 $0
Total Operating Expenses $122,925 $140,950 $144,450
Profit Before Interest and Taxes $15,075 $10,850 $22,530
EBITDA $15,075 $10,850 $22,530
Interest Expense $0 $0 $0
Taxes Incurred $4,523 $3,255 $6,759
Net Profit $10,553 $7,595 $15,771
Net Profit/Sales 7.65% 5.00% 9.44%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $138,000 $151,800 $166,980
Subtotal Cash from Operations $138,000 $151,800 $166,980
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 $138,000 $151,800 $166,980
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $85,500 $101,000 $118,000
Bill Payments $37,914 $43,687 $34,031
Subtotal Spent on Operations $123,414 $144,687 $152,031
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 $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $123,414 $144,687 $152,031
Net Cash Flow $14,586 $7,113 $14,949
Cash Balance $39,486 $46,599 $61,548
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $39,486 $46,599 $61,548
Other Current Assets $0 $0 $0
Total Current Assets $39,486 $46,599 $61,548
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $39,486 $46,599 $61,548
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $4,033 $3,551 $2,730
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $4,033 $3,551 $2,730
Long-term Liabilities $0 $0 $0
Total Liabilities $4,033 $3,551 $2,730
Paid-in Capital $45,000 $45,000 $45,000
Retained Earnings ($20,100) ($9,548) ($1,953)
Earnings $10,553 $7,595 $15,771
Total Capital $35,453 $43,048 $58,819
Total Liabilities and Capital $39,486 $46,599 $61,548
Net Worth $35,453 $43,048 $58,819
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 10.00% 10.00% 5.90%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 50.50%
Total Current Assets 100.00% 100.00% 100.00% 60.80%
Long-term Assets 0.00% 0.00% 0.00% 39.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.21% 7.62% 4.43% 39.80%
Long-term Liabilities 0.00% 0.00% 0.00% 14.10%
Total Liabilities 10.21% 7.62% 4.43% 53.90%
Net Worth 89.79% 92.38% 95.57% 46.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 92.35% 95.00% 90.56% 57.10%
Advertising Expenses 3.48% 3.29% 2.99% 0.40%
Profit Before Interest and Taxes 10.92% 7.15% 13.49% 2.00%
Main Ratios
Current 9.79 13.12 22.55 1.37
Quick 9.79 13.12 22.55 1.12
Total Debt to Total Assets 10.21% 7.62% 4.43% 53.90%
Pre-tax Return on Net Worth 42.52% 25.20% 38.30% 6.90%
Pre-tax Return on Assets 38.18% 23.28% 36.61% 15.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.65% 5.00% 9.44% n.a
Return on Equity 29.77% 17.64% 26.81% n.a
Activity Ratios
Accounts Payable Turnover 10.40 12.17 12.17 n.a
Payment Days 27 32 35 n.a
Total Asset Turnover 3.49 3.26 2.71 n.a
Debt Ratios
Debt to Net Worth 0.11 0.08 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $35,453 $43,048 $58,819 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.29 0.31 0.37 n.a
Current Debt/Total Assets 10% 8% 4% n.a
Acid Test 9.79 13.12 22.55 n.a
Sales/Net Worth 3.89 3.53 2.84 n.a
Dividend Payout 0.00 0.00 0.00 n.a