Veterinary Clinic Business Plan

Southwest Veterinary Clinic

Financial Plan

The following is the financial plan for Southwest Veterinary Clinic.

7.1 Break-even Analysis

The monthly break-even point is $30,000.

Veterinary clinic business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$28,351

Assumptions:
Average Percent Variable Cost	24%
Estimated Monthly Fixed Cost	$21,641

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	$417,000	$450,000	$490,000
Direct Cost of Sales	$98,700	$110,000	$120,000
Other Production Expenses	$0	$0	$0
Total Cost of Sales	$98,700	$110,000	$120,000

Gross Margin	$318,300	$340,000	$370,000
Gross Margin %	76.33%	75.56%	75.51%


Expenses
Payroll	$168,000	$183,000	$198,000
Sales and Marketing and Other Expenses	$6,000	$6,000	$6,000
Depreciation	$11,424	$11,424	$11,424
Leased Equipment	$0	$0	$0
Utilities	$3,600	$3,600	$3,600
Insurance	$7,200	$7,200	$7,200
Rent	$36,000	$36,000	$36,000
Payroll Taxes	$27,465	$30,300	$32,400
Other	$0	$0	$0

Total Operating Expenses	$259,689	$277,524	$294,624

Profit Before Interest and Taxes	$58,611	$62,476	$75,376
EBITDA	$70,035	$73,900	$86,800
Interest Expense	$14,242	$12,901	$11,502
Taxes Incurred	$13,311	$14,872	$19,162

Net Profit	$31,058	$34,702	$44,712
Net Profit/Sales	7.45%	7.71%	9.12%

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	$417,000	$450,000	$490,000
Subtotal Cash from Operations	$417,000	$450,000	$490,000

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	$417,000	$450,000	$490,000

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$168,000	$183,000	$198,000
Bill Payments	$181,390	$227,847	$234,632
Subtotal Spent on Operations	$349,390	$410,847	$432,632

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	$13,992	$13,992	$13,992
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$363,382	$424,839	$446,624

Net Cash Flow	$53,618	$25,161	$43,376
Cash Balance	$78,618	$103,779	$147,154

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	$78,618	$103,779	$147,154
Other Current Assets	$0	$0	$0
Total Current Assets	$78,618	$103,779	$147,154

Long-term Assets
Long-term Assets	$110,000	$110,000	$110,000
Accumulated Depreciation	$11,424	$22,848	$34,272
Total Long-term Assets	$98,576	$87,152	$75,728
Total Assets	$177,194	$190,931	$222,882

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$25,128	$18,154	$19,386
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$25,128	$18,154	$19,386

Long-term Liabilities	$136,008	$122,016	$108,024
Total Liabilities	$161,136	$140,170	$127,410

Paid-in Capital	$80,000	$80,000	$80,000
Retained Earnings	($95,000)	($63,942)	($29,239)
Earnings	$31,058	$34,702	$44,712
Total Capital	$16,058	$50,761	$95,472
Total Liabilities and Capital	$177,194	$190,931	$222,882

Net Worth	$16,058	$50,761	$95,472

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 0742, Veterinary Services, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	7.91%	8.89%	-2.90%

Percent of Total Assets
Other Current Assets	0.00%	0.00%	0.00%	32.60%
Total Current Assets	44.37%	54.35%	66.02%	59.90%
Long-term Assets	55.63%	45.65%	33.98%	40.10%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	14.18%	9.51%	8.70%	31.10%
Long-term Liabilities	76.76%	63.91%	48.47%	21.50%
Total Liabilities	90.94%	73.41%	57.16%	52.60%
Net Worth	9.06%	26.59%	42.84%	47.40%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	76.33%	75.56%	75.51%	40.00%
Selling, General & Administrative Expenses	71.42%	70.80%	68.96%	23.70%
Advertising Expenses	1.44%	1.33%	1.22%	0.50%
Profit Before Interest and Taxes	14.06%	13.88%	15.38%	3.60%

Main Ratios
Current	3.13	5.72	7.59	1.95
Quick	3.13	5.72	7.59	1.26
Total Debt to Total Assets	90.94%	73.41%	57.16%	52.60%
Pre-tax Return on Net Worth	276.30%	97.66%	66.90%	5.50%
Pre-tax Return on Assets	25.04%	25.96%	28.66%	11.60%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	7.45%	7.71%	9.12%	n.a
Return on Equity	193.41%	68.36%	46.83%	n.a

Activity Ratios
Accounts Payable Turnover	8.22	12.17	12.17	n.a
Payment Days	27	36	29	n.a
Total Asset Turnover	2.35	2.36	2.20	n.a

Debt Ratios
Debt to Net Worth	10.03	2.76	1.33	n.a
Current Liab. to Liab.	0.16	0.13	0.15	n.a

Liquidity Ratios
Net Working Capital	$53,490	$85,625	$127,768	n.a
Interest Coverage	4.12	4.84	6.55	n.a

Additional Ratios
Assets to Sales	0.42	0.42	0.45	n.a
Current Debt/Total Assets	14%	10%	9%	n.a
Acid Test	3.13	5.72	7.59	n.a
Sales/Net Worth	25.97	8.87	5.13	n.a
Dividend Payout	0.00	0.00	0.00	n.a