Scan Lab

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Medical Scanning Lab Business Plan

Financial Plan

The following sections will outline the financial planning for Scan Lab.

8.1 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 30.00% 30.00% 30.00%
Other 0 0 0

8.2 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 $40,582
Assumptions:
Average Percent Variable Cost 23%
Estimated Monthly Fixed Cost $31,248

8.3 Projected Profit and Loss

The following table and charts will indicate Projected Profit and Loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $422,344 $442,500 $486,750
Direct Cost of Sales $97,139 $102,300 $105,440
Other Costs of Sales $0 $0 $0
Total Cost of Sales $97,139 $102,300 $105,440
Gross Margin $325,205 $340,200 $381,310
Gross Margin % 77.00% 76.88% 78.34%
Expenses
Payroll $127,200 $131,016 $134,846
Sales and Marketing and Other Expenses $6,000 $0 $0
Depreciation $172,300 $0 $0
Rent $24,000 $0 $0
Utilities $6,000 $0 $0
Insurance $18,000 $0 $0
Payroll Taxes $19,080 $0 $0
Other $2,400 $0 $0
Total Operating Expenses $374,980 $131,016 $134,846
Profit Before Interest and Taxes ($49,775) $209,184 $246,464
EBITDA $122,525 $209,184 $246,464
Interest Expense $79,500 $68,000 $56,000
Taxes Incurred $0 $42,355 $57,139
Net Profit ($129,275) $98,829 $133,325
Net Profit/Sales -30.61% 22.33% 27.39%

8.4 Projected Cash Flow

The following table and chart will indicate Projected Cash Flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $105,586 $110,625 $121,688
Cash from Receivables $240,226 $328,223 $357,044
Subtotal Cash from Operations $345,812 $438,848 $478,732
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 $345,812 $438,848 $478,732
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $127,200 $131,016 $134,846
Bill Payments $227,987 $219,308 $218,092
Subtotal Spent on Operations $355,187 $350,324 $352,938
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 $120,000 $120,000 $120,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $475,187 $470,324 $472,938
Net Cash Flow ($129,375) ($31,477) $5,793
Cash Balance $188,525 $157,048 $162,841

8.5 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 $188,525 $157,048 $162,841
Accounts Receivable $76,532 $80,184 $88,203
Other Current Assets $0 $0 $0
Total Current Assets $265,057 $237,232 $251,044
Long-term Assets
Long-term Assets $861,500 $861,500 $861,500
Accumulated Depreciation $172,300 $172,300 $172,300
Total Long-term Assets $689,200 $689,200 $689,200
Total Assets $954,257 $926,433 $940,244
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $24,132 $17,479 $17,965
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $24,132 $17,479 $17,965
Long-term Liabilities $740,000 $620,000 $500,000
Total Liabilities $764,132 $637,479 $517,965
Paid-in Capital $330,000 $330,000 $330,000
Retained Earnings ($10,600) ($139,875) ($41,046)
Earnings ($129,275) $98,829 $133,325
Total Capital $190,125 $288,954 $422,279
Total Liabilities and Capital $954,257 $926,433 $940,244
Net Worth $190,125 $288,954 $422,279

8.6 Business Ratios

The following table details Business Ratios as they relate to Scan Lab, as well as the Diagnostic Imaging Center industry, NAICS code 612512, that it participates in.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 4.77% 10.00% 8.83%
Percent of Total Assets
Accounts Receivable 8.02% 8.66% 9.38% 29.41%
Other Current Assets 0.00% 0.00% 0.00% 48.00%
Total Current Assets 27.78% 25.61% 26.70% 80.30%
Long-term Assets 72.22% 74.39% 73.30% 19.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 2.53% 1.89% 1.91% 30.82%
Long-term Liabilities 77.55% 66.92% 53.18% 21.77%
Total Liabilities 80.08% 68.81% 55.09% 52.59%
Net Worth 19.92% 31.19% 44.91% 47.41%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 77.00% 76.88% 78.34% 100.00%
Selling, General & Administrative Expenses 102.84% 0.00% 0.00% 66.55%
Advertising Expenses 0.00% 0.00% 0.00% 0.85%
Profit Before Interest and Taxes -11.79% 47.27% 50.63% 5.72%
Main Ratios
Current 10.98 13.57 13.97 1.77
Quick 10.98 13.57 13.97 1.49
Total Debt to Total Assets 80.08% 68.81% 55.09% 54.16%
Pre-tax Return on Net Worth -67.99% 48.86% 45.10% 6.71%
Pre-tax Return on Assets -13.55% 15.24% 20.26% 14.64%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -30.61% 22.33% 27.39% n.a
Return on Equity -67.99% 34.20% 31.57% n.a
Activity Ratios
Accounts Receivable Turnover 4.14 4.14 4.14 n.a
Collection Days 56 86 84 n.a
Accounts Payable Turnover 10.45 12.17 12.17 n.a
Payment Days 27 36 30 n.a
Total Asset Turnover 0.44 0.48 0.52 n.a
Debt Ratios
Debt to Net Worth 4.02 2.21 1.23 n.a
Current Liab. to Liab. 0.03 0.03 0.03 n.a
Liquidity Ratios
Net Working Capital $240,925 $219,754 $233,079 n.a
Interest Coverage -0.63 3.08 4.40 n.a
Additional Ratios
Assets to Sales 2.26 2.09 1.93 n.a
Current Debt/Total Assets 3% 2% 2% n.a
Acid Test 7.81 8.99 9.06 n.a
Sales/Net Worth 2.22 1.53 1.15 n.a
Dividend Payout 0.00 0.00 0.00 n.a