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    Confidential Information of HCA & Company Z 1

    Company Z

    Business Plan

    Prepared For

    Client Z

    May 10, 2010

    Kieran Gupta, Tim Munuhe, Riaz ViraniEnterprise Research Team

    HOPKINS CONSULTING AGENCY

    104 Whitehead HallThe Johns Hopkins University

    3400 North Charles StreetBaltimore, MD 21218Office: 410.516.6421

    Fax: [email protected]

    www.jhu.edu/hca

    mailto:[email protected]://www.jhu.edu/hcahttp://www.jhu.edu/hcamailto:[email protected]
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    Table of ContentsI. Executive Summary .............................................................................................................. 3

    I.A. Mission ..................................................................................................................... 4

    I.B. Keys to Success ........................................................................................................ 4

    I.C. Future Objectives ..................................................................................................... 4

    II. Company Summary ............................................................................................................... 5

    II.A. Company Ownership ................................................................................................ 5

    II.B. Start-up Summary ..................................................................................................... 5

    III. Services ................................................................................................................................. 7

    III.A. Senior Citizens ......................................................................................................... 7

    III.B. Autistic Young Men ................................................................................................. 7

    IV. Market Analysis .................................................................................................................... 8

    IV.A. Market Segmentation ............................................................................................... 9IV.B. Service Business Analysis ...................................................................................... 12

    IV.C. Competition & Buying Patterns/Needs .................................................................. 13

    V. Strategy and Implementation .............................................................................................. 15

    V.A. Sales Strategy ......................................................................................................... 15

    V.B. Sales Forecast ......................................................................................................... 16

    V.C. Marketing Strategy ................................................................................................. 17

    VI. Management ........................................................................................................................ 18

    VII. Financial Plan ...................................................................................................................... 19VII.A. Assumptions ........................................................................................................... 19

    VII.B. Break-Even Analysis .............................................................................................. 20

    VII.C. Projected Profit and Loss ....................................................................................... 21

    VII.D. Projected Balance Sheet ......................................................................................... 25

    VII.E. Business Ratios ....................................................................................................... 27

    VIII. Appendixes .......................................................................................................................... 28

    VIII.A.Startup Summary .................................................................................................... 28

    VIII.B.Payroll Calculations ............................................................................................... 30

    VIII.C. Break-Even Calculations ........................................................................................ 31

    VIII.D.Income Statement Calculations .............................................................................. 34

    IX. References ........................................................................................................................... 38

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    I. Executive SummaryIntroduction

    Company Z (Z) is a start-up company in the Somewhere residential area. It is the mission of Zto construct a housing community to provide affordable living for senior citizens as well as an

    activity day center to assist young men with autism in the Somewhere Area. Z aims to be anaffordable and reliable residential retirement community and autism day center operator.

    The Company

    Z is a limited liability company registered in the state of Somewhere. Its founder and soleproprietor is Mr. Client Z.

    The company plans to be leveraged through private investment, bank loans, and grant money.The company expects to begin offering its services in August 2012.

    The Services

    Z plans to offer community-based services to independent senior citizens (with and withoutdisabilities) and day center services to autistic young men at affordable rates. These serviceswill include:

    community-based activities and support services such as estate planning, cooking,fellowship, Bible study, and recreational activities to engage senior citizens in an activelifestyle

    residential accommodations for seniors with disabilities shuttle service to local stores, banks, the local stadium, and other locations of interest for

    seniors and autistic young men community support for autistic young men (include community outings and

    speech/occupational therapy provided by third party licensed therapists) volunteer recreational activities to engage autistic individuals in the local community

    (clean up of the local communities, volunteer assistance, etc)

    The Market

    The number of individuals reaching retirement age is at an all-time high, and is expected togrow by 36.2% between 2010 and 20201. A large percentage of those individuals require anaffordable, community-based environment in order to continue to lead active and healthy lives.Specifically, the population of those between the ages of 55 and 64 in the Somewhere areaalone rose by 19.1% between 2000 and 20072. With these same baby boomers reachingretirement age in the next decade, the retirement market is poised to undergo major growth inthe years to come. In 1999, the segment of the population over the age of 55 spent $179.4billion on housing.

    3This housing expenditure will rise as baby boomers near retirement age.

    Financial Considerations

    Because the housing project has yet to be constructed, start-up expenses and funding

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    Confidential Information of HCA & Company Z 4

    requirements are relatively high. Most of the companys liabilities will be received from outside

    private investors, relevant grant money, and borrowings from BB&T Bank, Chevy Chase Bank,or the local Federal Credit Union. A long term loan will be paid off in approximately 20 years.

    The company expects to be profitable in the first year after operations begin and does not

    anticipate any serious problems in cash flow. For the Retirement Home, we anticipate that 12sales per year will guarantee a break-even point. For the Autism Center, we anticipate that 30yearly membership fees will guarantee a break-even point.

    I.A. Mission

    It is the mission of Z to provide affordable residential community-based services in a newly-constructed senior-living community at the intersection of 1

    stStreet and 2

    ndStreet in the

    Somewhere area. It is also the mission of Z to provide quality day services for autism youngmean at an Autism Community Day Center, to be constructed at the corner of 3rd Street and 4thStreet in the Somewhere Area. In addition Z will purchase rental properties in several areas for

    purposes of renting to low-income families at affordable rates.

    I.B. Keys to Success

    Zs initial start-up success and long-term sustainability are guaranteed as follows: Mr. Client Zs existing experience working with senior citizens and autistic individuals in

    his community through his church and other community-based organizations. A significant demand and need for an affordable senior residential community and day

    center for autistic young men in the area. The residential neighborhood status of the proposed construction site. A proposed efficient management operation (managed directly by Mr. Z) with minimal

    overhead and strong expected support from local volunteers.

    I.C. Future Objectives

    The three year goals for Company Z are as follows: Achieve break-even by year one after beginning operations. Provide quality housing at significantly lower cost than existing senior living housing

    communities. Provide safe and affordable day services for young men with autism who, if left alone,

    are potential dangers to themselves and those around them. Establish a minimum 95% resident satisfaction rate in order to foster goodwill towards

    the company and encourage positive word-of-mouth marketing Secure tenants for all purchased properties through the Housing Authority in the

    respective counties.

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    II. Company SummaryCompany Z is a limited-liability company (LLC) registered in the state of Somewhere. Mr.Client Z, the founder of the company, has strong roots in community and volunteer organizationsand autism-awareness organizations. The company website can be found atww.companyzllc.com

    II.A. Company Ownership

    Z is owned by Mr. Client Z. He founded Z with the vision of improving local communities andproviding affordable real estate, residential, and activity center services.

    II.B. Start-up Summary

    The tables below provide details of expected startup expenses and sources of startup funding.

    Retirement Home (see Appendix VIII.A)

    SOURCES OF CAPITAL

    Owner's InvestmentPersonal Investment $21,000

    Expected Bank Loans $519,167

    Expected Grants $10,000

    Total Capital $550,167

    STARTUPS EXPENSES

    Buildings/Real Estate

    Construction $400,000

    Architect $7,000

    Total Buildings/Real Estate $407,000

    Capital Equipment

    Furniture $35,000

    Fixtures $10,000

    Appliances $10,000

    Computers/IT $2,000

    Vans $20,000

    Total Capital Equipment $77,000

    Location and Admin Expenses

    Utility Deposits $1,000

    Legal and Accounting $5,000

    PreOpening Salaries $4,167

    Total Location and Admin Expenses $10,167

    Working Capital $35,000

    Total Expenses $529,167

    http://www.taylor-fletcherinvestmentgroupllc.com/http://www.taylor-fletcherinvestmentgroupllc.com/http://www.taylor-fletcherinvestmentgroupllc.com/
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    Autism Center (see Appendix VIII.A)

    SOURCES OF CAPITAL

    Owner's Investment

    Personal Investment $14,500

    Expected Bank Loans $276,750Expected Grants $10,000

    Total Capital $301,250

    STARTUPS EXPENSES

    Buildings/Real Estate

    Construction $200,000

    Architect $7,000

    Total Buildings/Real Estate $207,000

    Capital Equipment

    Furniture $15,000

    Fixtures $6,000

    Appliances $5,000

    Computers/IT $3,000

    Vans $20,000

    Total Capital Equipment $49,000

    Location and Admin Expenses

    Utility Deposits $1,000

    Legal and Accounting $5,000

    PreOpening Salaries$4,750

    Total Location and Admin Expenses $10,750

    Working Capital $20,000

    Total Expenses $286,750

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    III. ServicesIII.A.Senior Citizens

    A three-story (2500 square feet per floor) residential building for independent seniorswhere services include:

    Shuttle service to local shops, banks, the post office, the Stadium, and otherlocations of interest.

    Bible study and fellowship community support. Cooking and other household-based activities. Estate planning to help senior citizens make informed decisions regarding their

    assets and heirs. Recreational services to keep senior citizens engaged in an active lifestyle. Residential accommodations for seniors with disabilities (handicap-accessible

    rooms, stand up bathing tubs, hand rail assistance in all locations, electric wheelchairs, etc).

    Special events and activities on designated holidays throughout the year(Thanksgiving, Christmas, New Years, etc).

    III.B.Autistic Young Men

    A two-story (2200 square feet per floor) daytime activity center where services include: Recreational activities (sports games and other physical activities). Vocational training to give autistic individuals skills to be productive members of

    society. Community outings to local stores to provide safe and convenient access to the

    greater community. Volunteer activities in the local community. Third party speech therapist and occupational therapist services (services are

    provided by licensed third-party therapists with sliding scale fees negotiateddirectly between therapist and client).

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    IV. Market AnalysisZ will focus on several different market segments. The first market segment is the retirementmarket, consisting of elderly individuals and couples seeking to retire into an affordable andenjoyable senior community in the Somewhere area. The second market segment is the autisticyoung adult market, consisting of young men ages 18-30 who have serious cases of autism that

    would otherwise render them a safety hazard to themselves and others if left alone without asupport community. The third market is low-income families who require affordable rentalproperties.

    The retirement market has been growing over the past few decades. The percentage ofretirement-age individuals in the US is at 12.3% and is growing at a rate of 3% each year.4

    The growth in the number of cases of children with autism, ages 6-22 in the Somewhere area,grew by 804% between 1993 and 2003.

    5As more cases will be diagnosed in the coming years,

    there will be a need for better resources to take care of this minority.

    Demand for Residential Real Estate

    Somewhere Area

    Industry Market Size Growth

    Rate

    Base

    Year

    Basis for Estimate

    ResidentialReal Estate(Projected 2012)

    $112.5 million 1.8 %CAGR

    (2007-11)

    2007 The US market for residential real estate isdecelerating, with an expected CAGR of 1.8%for 2007-2011 period.6 The projected latentdemand for residential real estate managementin 2012 in the Somewhere Area isapproximately 0.18% of the total US demand.7

    The following factors are positive drivers for the residential real estate industry:

    Increasing number of baby boomers spending more money in the US housing market8

    Promotion of green technologies has created demand for more environmentally responsible

    construction9 Homicides in the Somewhere area grew by 10% between 2006 and 2008

    10, and there were

    8,320 violent crimes recorded in 200711. Violent crimes in the city will create a need forsafe, affordable housing.

    The following factors present a threat to the residential real estate industry: Costs for building materials are expected to be high at least until 2010

    12

    Popularity of refurbishing homes instead of moving will remain, especially as the older

    segment of the population insists on staying in their existing homes13

    Recent subprime mortgage meltdown has led developers to cut down on residential

    construction14

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    IV.A.Market Segmentation

    Market: Retirement-Age Individuals

    Growth 2012 2013 2014 2015 2016 CAGRRetirees

    in SomewhereArea

    34% 59,304 61,192 63,080 64,968 66,856 34% between

    2010-2020

    Justification The retiredcommunity isexpected toincrease by34% between2010 and 2020.15

    2012 retiree population was projected by use of SocialSecurity retiree statistics and Metropolitan DemographicTrends projected growth rates. Assuming steady growth overa 10-year period suggests annual growth rate of 3.4%.

    54,000

    56,000

    58,000

    60,000

    62,000

    64,000

    66,000

    68,000

    2012 2013 2014 2015 2016

    Retirees(Somewhere Area)

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    Market: Autistic Young Men

    Growth 2010 2011 2012 2013 2014 CAGRAutisticMales

    in Somewhere

    Area*

    10% 305 335 365 395 425 39% growthexpected

    2010 -201416

    Justification Interpretationof autism caseannual growthchart17

    Assuming constant growth rate.

    * Note: detailed statistics and future projections for this market niche are unavailable; the information above is extrapolated fromexisting aggregate data

    0

    50

    100

    150

    200

    250

    300

    350

    400

    450

    2010 2011 2012 2013 2014

    Autistic Males(Somewhere Area)

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    Market: Low-Income Rentals

    Growth 2012 2013 2014 2015 2016 CAGRImpoverished

    Familiesin Somewhere

    Area*

    -2.2 %

    12592 12316 12047 11783 11525

    -8.5 %between2012 and

    2016Justification Data has been

    extrapolatedfrom USCensus BureauData18

    Impoverished families are defined by the United StatesDepartment of Health & Human Services PovertyGuidelines19. In addition, as of 2008, there were nearly 600homeless families in the Somewhere area.20

    * Note: detailed statistics and future projections for this market niche are unavailable; the information above is extrapolated fromexisting aggregate data

    While the calculated trend shows a steady decline in the number of impoverished families in theSomewhere area, this negative growth is not significant to create a sizable reduction in themarket. With this trend, the number of impoverished families would not decrease below 10,000until at least 2023. This is unlikely to happen, as no data was located that came during the recentsub-prime mortgage meltdown, which is said to be causing an increase in the number of

    homeless families.21

    As a result, it is likely that the market for impoverished families will behigher than what the data suggests.

    10000

    10500

    11000

    11500

    12000

    12500

    13000

    2012 2013 2014 2015 2016

    Impoverished Families(Somewhere Area)

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    IV.B.Service Business Analysis

    The retirement home industry in general is highly crowded, with thousands of senior housingcommunities ranging from major brand-name firms to small independently-operated locations.However, in the targeted Somewhere area, there is a shortage of retirement communities,

    especially those that are affordable. Independent living facilities in the US in 2006 hadoccupancy rates averaging 93%, hinting at the demand for these kinds of retirementcommunities.22

    The industry for activity day centers for autistic young men is a niche market, with very fewfirms providing such specific services.23 There do exist some activity centers for individuals withspecial needs, however there are few in the Somewhere Area. There are mostly individualcaregivers, a few of whom are capable of working with adults.

    24The Day Centers typically only

    provide care for children (under the age of 18), and do not provide services for young men. 25

    Therefore, the customer power in these industries is relatively low since the availability of

    comparable housing communities and activity centers in the area is very low. Potential clientshave few choices when shopping for housing communities, thus generating market pulldemand for Zs services.

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    IV.C.Competition & Buying Patterns/Needs

    Z is more affordable than competitors and provides more personalized service. Also, Zeliminates overhead costs through efficient operations.

    The following table gives an overview of some major corporate competitors in the residentialreal estate industry.

    CompetitorsResidential Real Estate

    Company Profile TrendEquity ResidentialProperties Trust26

    Engaged in the acquisition, development, ownership,management and operation of multifamily properties.

    Headquarters: Chicago, Illinois Operations: throughout the US (primarily) Size: 6,000 employees Revenue: $1,990.4 million (2006)

    Growing

    Ventas Inc.27 Acquires and manages nursing homes, hospitals, senior

    housing properties, and real estate/mortgage loans Headquarters: Louisville, Kentucky Operations: US and Canada Size: 53 employees Revenue: $778.1 Million (FY2007)

    Growing

    Sunrise Senior Living,Inc.28

    Provides independent and assisted living, as well as carefor those with Alzheimers, home care, nursing, and

    rehabilitative health Headquarters: McLean, Virginia Operations: US, UK, Canada, and Germany Size: 41,000 employees Revenue: $1.65 Billion

    Contracting

    profits shrank by76.6% betweenthe 2005 and 2006fiscal years.

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    The following table gives an overview of some major corporate competitors who operate DayCenters or Activity Centers to provide services to individuals with special needs. Note that theseCenters only provide services for children and do not permit young men (over age 21) to attendthe Center.

    Competitors

    Activity Centers for Special Needs IndividualsCompany Profile TrendEagleton School29 Based and operates in Western Massachusetts

    Works with special needs boys ages 9-22 Residential, year long program

    Steady, Eagletonis well establishedwith manyconnections

    Twinkling Eye DayCenter30

    Based and operates in Virginia Beach, Virginia Works with special needs children ages 2-12 Non-residential, day center

    Growing, wasestablished in2007 and had 26kids as of lastyear31

    The Auburn School32 Based and operates in Northern Virginia Works with special needs children grades 1 through 8

    Charges $34,000+ in tuition and fees yearly Requires prospective students to go through admissions

    process

    Has not openedfor business yet

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    V. Strategy and ImplementationZs business strategy is to begin operations in the limited Somewhere geographic area, whereMr. Client Z can leverage his years of personal experience working with the elderly and theautistic to provide a personalized support environment in his housing community at an extremelyaffordable rate. Z believes the Company can provide exemplary service in this limited market

    and can easily out-compete larger brand-name retirement communities both in quality of serviceand affordability of cost.

    V.A. Sales Strategy

    Zs founder, Mr. Client Z, will focus on leveraging his extensive network of communityconnections with various senior citizen communities and autism-awareness organizations togenerate sales. In addition, Z will offer personalized service and attention to every customer,thereby garnering positive word-of-mouth advertisement and further business through references.

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    V.B. Sales Forecast

    Sales are based on the various clients we anticipate acquiring. The Company does not have anysignificant direct costs associated with sales.

    $0

    $50,000

    $100,000

    $150,000

    $200,000

    $250,000

    Year 1 Year 2 Year 3

    Total Sales By Year

    Retirement Home

    $0

    $100,000

    $200,000

    $300,000

    $400,000

    Year 1 Year 2 Year 3

    Total Sales By YearAutism Center

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    V.C. Marketing Strategy

    Z will utilize a diverse set of resources for marketing its services:

    Mr. Client Z will leverage his existing connections with members of the senior citizen

    communities in order to encourage word-of-mouth advertisement. Mr. Client Z will leverage his existing personal connections with autism-awareness

    organizations to promote his day center to provide services to autistic young men. Mr. Client Z will leverage his existing community relationships (developed through his

    active participation in church activities, community volunteer organizations, etc.) togarner word-of-mouth advertisement.

    Mr. Client Z aims to provide personalized service and attention to each and everyindividual who is a member of his residential or day center community, therebydeveloping a positive reputation for Z.

    Z will advertise through local newspapers, churches, and social service organizations. Z will conduct comparisons with other similar residential properties in order to

    benchmark marketing strategy and services provided and to constantly improve both.

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    VI. ManagementMr. Client Z will retain management of the Retirement Home and the Day Center.He will hire his own employees and personal management staff.

    Personnel PlanRetirement Home (see Appendix VIII.B)Personnel Year 1 Year 2 Year 3

    Assistant Manager $50,000 $51,000 $52,000Accountant ($50/hr) $6,000 $6,240 $6,480Secretarial/Office (part-time) ($13/hr) $13,500 $14,000 $14,500Cleaning Staff ($500 p/month) $6,000 $6,250 $6,500Driver (part-time for shuttles) ($10/hr) $10,000 $10,500 $11,000

    Total Payroll $85,500 $87,990 $90,480

    Personnel PlanAutism Center (see Appendix VIII.B)Personnel Year 1 Year 2 Year 3Manager $57,000 $58,000 $59,000Assistant Manager $55,000 $56,000 $58,000

    Accountant ($50/hr) $6,000 $6,240 $6,480Secretarial/Office (part-time) ($13/hr) $13,500 $14,000 $14,500Cleaning Staff ($1000 p/month) $12,000 $12,500 $13,000Driver (for shuttles) ($10/hr) $10,000 $10,500 $11,000

    Total Payroll $153,500 $157,240 $161,980

    Management

    65%

    Part-Time

    Support

    16%

    Clerical /

    Accounting19%

    Personnel Budget Breakdown

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    VII. Financial PlanVII.A. Assumptions

    In order to complete financial calculations, we have made the following assumptions:

    For the Retirement Home, revenues will be almost entirely in cash. There will be nocredit given to tenants for credit, which is the Companys main source of revenue.

    For both locations, after Year Three of operations, occupancy/membership will stay at ornear 100% due to the highly competitive cost of the facilities.

    There will be healthy growth trend in the market for retirement home facilities and autismday centers (as indicated in IV.A Market Segmentation)

    For the Retirement Home, the rent will be $1279 per month (excluding utilities), with amaximum occupancy capacity of 15 residents.

    For the Autism Day Center, the fee will be on average $140 per week, with a maximumcapacity of 50 members. (This will be a sliding scale fee).

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    VII.B. Break-Even Analysis

    Our break-even analysis is based on the assumption that our gross margin is 100 percent (thedirect cost of sales is insignificant).

    We estimate that the break-even point will occur at 12 sales for the Retirement Home.

    (See Appendix VIII.C)

    We estimate that the break-even point will occur at 30 sales for the Autism Center.

    (See Appendix VIII.C)

    -$200,000

    -$150,000

    -$100,000

    -$50,000

    $0

    $50,000

    $100,000

    0 5 10 15

    NetI

    ncome

    # of Residents

    Break-Even AnalysisRetirement Home

    -$250,000

    -$200,000

    -$150,000

    -$100,000

    -$50,000

    $0

    $50,000

    $100,000

    $150,000

    0 10 20 30 40 50

    Net

    Income

    # of Members

    Break-Even AnalysisAutism Center

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    VII.C. Projected Profit and Loss

    Pro Forma Income StatementRetirement Home (see Appendix VIII.D)

    Year 1 Year 2 Year 3

    Revenue

    # of Units 12 13 14Annual Price p/Unit $15,348 $15,808 $16,441

    Total Sales Revenue $184,176 $205,510 $230,171

    Direct Cost of Sales $0 $0 $0

    Gross Margin $184,176 $205,510 $230,171

    Gross MarginPercentage

    100% 100% 100%

    ExpensesPayroll $85,500 $87,990 $90,480

    Sales and Marketing $1,000 $1,030 $1,071

    Depreciation $29,926 $51,876 $39,674

    Utilities $6,640 $6,839 $7,113

    Landlords Insurance33 $7,800 $8,034 $8,355

    Travel $2,400 $2,472 $2,571

    Misc Activities $8,400 $8,652 $8,998

    Other $0 $0 $0

    Total Operating

    Expenses$141,666 $166,893 $158,262

    EBIT* $42,511 $38,617 $71,909

    Interest Expense $35,950 $35,058 $34,100

    Earnings Before

    Income Taxes$6,560 $3,559 $37,809

    Income Tax $984 $534 $5,671

    Net Income $5,576 $3,026 $32,138

    EBITDA** $72,436 $90,493 $111,583

    * Earnings before interest and taxes** Earnings before interest, taxes, depreciations, and amortization

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    -$10,000

    $0

    $10,000

    $20,000

    $30,000

    $40,000

    Year 1 Year 2 Year 3

    Total Profits By YearRetirement Home

    $0

    $50,000

    $100,000

    $150,000

    $200,000

    $250,000

    Year 1 Year 2 Year 3

    Gross Margin By YearRetirement Home

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    Pro Forma Income StatementAutism Center (see Appendix VIII.D)

    Year 1 Year 2 Year 3

    Revenue

    # of Units 12 13 14

    Annual Price p/Unit $15,348 $15,808 $16,441

    Total Sales Revenue $184,176 $205,510 $230,171

    Direct Cost of Sales $0 $0 $0

    Gross Margin $184,176 $205,510 $230,171

    Gross MarginPercentage

    100% 100% 100%

    ExpensesPayroll $85,500 $87,990 $90,480

    Sales and Marketing $1,000 $1,030 $1,071

    Depreciation $29,926 $51,876 $39,674Utilities $6,640 $6,839 $7,113

    Landlords Insurance34 $7,800 $8,034 $8,355

    Travel $2,400 $2,472 $2,571

    Misc Activities $8,400 $8,652 $8,998

    Other $0 $0 $0

    Total Operating

    Expenses$141,666 $166,893 $158,262

    EBIT* $42,511 $38,617 $71,909

    Interest Expense $35,950 $35,058 $34,100

    Earnings Before

    Income Taxes$6,560 $3,559 $37,809

    Income Tax $984 $534 $5,671

    Net Income $5,576 $3,026 $32,138

    EBITDA** $72,436 $90,493 $111,583

    * Earnings before interest and taxes** Earnings before interest, taxes, depreciations, and amortization

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    -$50,000

    $0

    $50,000

    $100,000

    $150,000

    $200,000

    Year 1 Year 2 Year 3

    Total Profits By YearAutism Center

    $0

    $100,000

    $200,000

    $300,000

    $400,000

    Year 1 Year 2 Year 3

    Gross Margin By YearAutism Center

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    VII.D. Projected Balance Sheet

    Pro Forma Balance SheetRetirement Home

    Year 0 Year 1 Year 2 Year 3

    Assets

    Current AssetsCash $44,167 $68,818 $110,475 $168,085

    Utilities Deposit $1,000 $1,000 $1,000 $1,000

    Total Current Assets $45,167 $69,818 $111,475 $169,085

    Non-Current Assets

    Land $21,000 $21,000 $21,000 $21,000

    Building $407,000 $407,000 $407,000 $407,000

    Accumulated Depreciation $0 $15,000 $43,876 $70,584

    Net Value $407,000 $392,000 $363,124 $336,416

    Furniture/Fixtures/Appliances $55,000 $55,000 $55,000 $55,000

    Accumulated Depreciation 0 $7,860 $21,329 $30,949

    Net Value $55,000 $47,141 $33,671 $24,052Computers/IT $2,000 $2,000 $2,000 $2,000

    Accumulated Depreciation $0 $400 $1,040 $1,424

    Net Value $2,000 $1,600 $960 $576

    Vans $20,000 $20,000 $20,000 $20,000

    Accumulated Depreciation $0 $6,666 $15,556 $18,518

    Net Value $20,000 $13,334 $4,444 $1,482

    Total Non-Current Assets $505,000 $475,075 $423,199 $383,526

    TOTAL ASSETS $550,167 $544,892 $534,674 $552,611

    LiabilitiesCurrent Liabilities

    Utilities Payable $0 $1,500 $1,500 $1,500

    Total Current Liabilities $0 $1,500 $1,500 $1,500

    Non-Current Liabilities

    Long-Term Notes Payable $519,167 $506,816 $493,572 $479,371

    Total Non-Current Liab. $519,167 $506,816 $493,572 $479,371

    TOTAL LIABILITIES $519,167 $508,316 $495,072 $480,871

    Equity

    Retained Earnings $0 $5,576 $8,602 $40,739Paid-In Capital $21,000 $21,000 $21,000 $21,000

    Grant $10,000 $10,000 $10,000 $10,000

    TOTAL EQUITY $31,000 $36,576 $39,602 $71,739

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    Pro Forma Balance SheetAutism Center

    Year 0 Year 1 Year 2 Year 3

    Assets

    Current AssetsCash $29,750 $103,509 $200,887 $313,426

    Utilities Deposit $1,000 $1,000 $1,000 $1,000

    Total Current Assets $30,750 $104,509 $201,887 $314,426

    Non-Current Assets

    Land $14,500 $14,500 $14,500 $14,500

    Building $207,000 $207,000 $207,000 $207,000

    Accumulated Depreciation $0 $7,500 $21,938 $35,292

    Net Value $207,000 $199,500 $185,062 $171,708

    Furniture/Fixtures/Appliances $26,000 $26,000 $26,000 $26,000

    Accumulated Depreciation 0 $3,715 $10,083 $14,630

    Net Value $26,000 $22,285 $15,917 $11,370

    Computers/IT $3,000 $3,000 $3,000 $3,000

    Accumulated Depreciation $0 $600 $1,560 $2,136Net Value $3,000 $2,400 $1,440 $864

    Vans $20,000 $20,000 $20,000 $20,000

    Accumulated Depreciation $0 $6,666 $15,556 $18,518

    Net Value $20,000 $13,334 $4,444 $1,482

    Total Non-Current Assets $270,500 $252,019 $221,363 $199,924

    TOTAL ASSETS $301,250 $356,527 $423,251 $514,350

    Liabilities

    Current LiabilitiesUtilities Payable $0 $1,500 $1,500 $1,500

    Total Current Liabilities $0 $1,500 $1,500 $1,500

    Non-Current LiabilitiesLong-Term Notes Payable $276,750 $270,166 $263,107 $255,537

    Total Non-Current Liab. $276,750 $270,166 $263,107 $255,537

    TOTAL LIABILITIES $276,750 $271,666 $264,607 $257,037

    Equity

    Retained Earnings $0 $60,361 $134,144 $232,814

    Paid-In Capital $14,500 $14,500 $14,500 $14,500

    Grant $10,000 $10,000 $10,000 $10,000

    TOTAL EQUITY $24,500 $84,861 $158,644 $257,314

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    VII.E. Business RatiosRatio AnalysisRetirement Home

    Year 1 Year 2 Year 3

    Main Ratios

    Current 46.55 74.32 112.72Total Debt to Total Assets 0.93 0.92 0.87

    Pre-Tax Return on Net Worth 17.94% 8.99% 52.70%

    Pre-Tax Return on Assets 1.20% 0.67% 6.84%

    Net Profit Margin 3.03% 1.47% 13.96%

    Return on Equity 15.25% 7.64% 44.80%

    Debt Ratios

    Debt to Net Worth 13.90 12.50 6.70

    Liquidity Ratios

    Interest Coverage 1.18 1.10 2.11

    Assets to Sales 2.96 2.60 2.40

    Ratio AnalysisAutism Center

    Year 1 Year 2 Year 3

    Main Ratios

    Current 69.67 134.59 209.62

    Total Debt to Total Assets 0.76 0.62 0.50

    Pre-Tax Return on Net Worth 86.98% 59.25% 52.19%

    Pre-Tax Return on Assets 20.70% 22.21% 26.11%Net Profit Margin 20.73% 22.52% 27.11%

    Return on Equity 71.13% 46.51% 38.35%

    Debt Ratios

    Debt to Net Worth 3.20 1.67 1.00

    Liquidity Ratios

    Interest Coverage 4.85 6.03 8.39

    Assets to Sales 1.22 1.29 1.41

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    VIII.AppendixesVIII.A. Startup Summary

    Retirement Home Explanation / Justification

    SOURCES OF CAPITALOwner's Investment

    Personal Investment $21,000Personal investment by Mr. Client Z(includes tax lien and legal fees).

    Expected Bank Loans $519,167 Calculated as equal to startup expenses.

    Expected Grants $10,000 Potential grant funding.

    Total Capital $550,167

    STARTUPS EXPENSES

    Buildings/Real Estate

    Construction $400,000 Based on 3 floors, 2500 sq ft per floor.

    Architect $7,000 Ibid.

    Total Buildings/Real Estate $407,000

    Capital Equipment

    Furniture $35,000 $2000/rm @ 15 rooms. Plus central rooms.

    Fixtures $10,000

    Appliances $10,000 Washing machines, refrigerators, microwaves.

    Computers/IT $2,000 Small investment in IT infrastructure.

    Vans $20,000 Cost of a used mid-size van. (Ford E-350).35

    Total Capital Equipment $77,000

    Location and Admin Expenses

    Utility Deposits $1,000

    Legal and Accounting $5,000 Related to operation of business.

    PreOpening Salaries $4,167 1 mo. salary for Assistant Manager.

    Total Location and Admin Expenses $10,167

    Working Capital $35,000 Percentage of loan amount.

    Total Expenses $529,167

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    Autism Center Explanation / Justification

    SOURCES OF CAPITAL

    Owner's Investment

    Personal Investment $14,500Personal investment by Mr. Client Z(includes tax lien and legal fees).

    Expected Bank Loans $276,750 Calculated as equal to startup expenses.Expected Grants $10,000 Potential grant funding.

    Total Capital $301,250

    STARTUPS EXPENSES

    Buildings/Real Estate

    Construction $200,000 Based on 2 floors, 2200 sq ft per floor.

    Architect $7,000 Ibid.

    Total Buildings/Real Estate $207,000

    Capital Equipment

    Furniture $15,000 Tables, chairs, desks, sofas, etc.

    Fixtures $6,000

    Appliances $5,000

    Computers/IT $3,000 IT Investment to train autistic individuals.

    Vans $20,000 Cost of a used mid-size van. (Ford E-350).36

    Total Capital Equipment $49,000

    Location and Admin Expenses

    Utility Deposits $1,000

    Legal and Accounting $5,000 Related to operation of business.

    PreOpening Salaries $4,750 1 mo. salary for Manager.Total Location and Admin Expenses $10,750

    Working Capital $20,000 Percentage of loan amount.

    Total Expenses $286,750

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    VIII.B. Payroll Calculations

    Personnel Plan Retirement HomePersonnel Status # Hours Time Interval (1 Year) Year One Assistant Manager Full time 40 / week 52 weeks $50,000

    Accountant End of month$50 / hr

    10 / month 12 months $6,000

    Secretarial/OfficePart Time$13/ hr

    20 / week 52 weeks $13,500

    Cleaning Staff37Monthly$500 / mo

    12 months -- $6,000

    DriverPart-Time$10 / hr

    20 / week 50 weeks $10,000

    Total Payroll $85,500

    Personnel Plan

    Autism CenterPersonnel Status # Hours Time Interval (1 Year) Year OneManager Full time 40 / week 52 weeks $57,000 Assistant Manager Full time 40 / week 52 weeks $55,000

    AccountantEnd of month$50 / hr

    10 / month 12 months $6,000

    Secretarial/OfficePart Time$13/ hr

    20 / week 52 weeks $13,500

    Cleaning Staff38Monthly$1000 / mo

    12 months -- $12,000

    Driver Part-Time$10 / hr 20 / week 50 weeks $10,000

    Total Payroll $153,500

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    VIII.C. Break-Even Calculations

    Break-Even Calculations Retirement Home

    Revenue

    # of Units 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

    Annual Priceper unit*

    $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348 $15,348

    Total Sales

    Revenue

    $0 $15,348 $30,696 $46,044 $61,392 $76,740 $92,088 $107,436 $122,784 $138,132 $153,480 $168,828 $184,176 $199,524 $214,872 $230,220

    Direct Costof Sales

    $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

    GrossMargin

    $0 $15,348 $30,696 $46,044 $61,392 $76,740 $92,088 $107,436 $122,784 $138,132 $153,480 $168,828 $184,176 $199,524 $214,872 $230,220

    G.M. % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

    Expenses

    TotalOperatingExpenses

    $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666 $141,666

    EBIT** -$141,666 -$126,318 -$110,970 -$95,622 -$80,274 -$64,926 -$49,578 -$34,230 -$18,882 -$3,534 $11,815 $27,163 $42,511 $57,859 $73,207 $88,555

    InterestExpense

    $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950 $35,950

    Pre-TaxEarnings

    -$177,616 -$162,268 -$146,920 -$131,572 -$116,224 -$100,876 -$85,528 -$70,180 -$54,832 -$39,484 -$24,136 -$8,788 $6,560 $21,908 $37,256 $52,604

    Income Tax $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $984 $3,286 $5,588 $8,151

    Net Income -$177,616 -$162,268 -$146,920 -$131,572 -$116,224 -$100,876 -$85,528 -$70,180 -$54,832 -$39,484 -$24,136 -$8,788 $5,576 $18,622 $31,668 $44,453

    * Based on $1279 per month rent** Earnings before interest and taxes

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    Break-Even Calculations Autism Center

    Revenue

    # of Units 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

    Price/mem* $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280

    Revenue $0 $7,280 $14,560 $21,840 $29,120 $36,400 $43,680 $50,960 $58,240 $65,520 $72,800 $80,080 $87,360 $94,640 $101,920 $109,200

    COS** $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

    G.M.*** $0 $7,280 $14,560 $21,840 $29,120 $36,400 $43,680 $50,960 $58,240 $65,520 $72,800 $80,080 $87,360 $94,640 $101,920 $109,200

    G.M. % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

    Expenses

    Oper. Ex. $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $ 198,221 $198,221 $198,221 $198,221 $198,221

    EBIT**** -$198,221 -$190,941 -$183,661 -$176,381 -$169,101 -$161,821 -$154,541 -$147,261 -$139,981 -$132,701 -$125,421 -$118,141 -$110,861 -$103,581 -$96,301 -$89,021

    Int. Exp. $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164

    Earnings -$217,385 -$210,105 -$202,825 -$195,545 -$188,265 -$180,985 -$173,705 -$166,425 -$159,145 -$151,865 -$144,585 -$137,305 -$130,025 -$122,745 -$115,465 -$108,185

    Inc. Tax 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

    Net Inc. -$177,616 -$162,268 -$146,920 -$131,572 -$116,224 -$100,876 -$85,528 -$70,180 -$54,832 -$39,484 -$24,136 -$8,788 $5,576 $18,622 $31,668 $44,453

    Revenue

    # of Units 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

    Price/mem* $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280

    Revenue $116,480 $123,760 $131,040 $138,320 $145,600 $152,880 $160,160 $167,440 $174,720 $182,000 $189,280 $196,560 $203,840 $211,120 $218,400 $225,680

    COS** $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

    G.M.*** $116,480 $123,760 $131,040 $138,320 $145,600 $152,880 $160,160 $167,440 $174,720 $182,000 $189,280 $196,560 $203,840 $211,120 $218,400 $225,680

    G.M. % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

    Expenses

    Oper. Ex. $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $ 198,221 $198,221 $198,221 $198,221 $198,221

    EBIT**** -$81,741 -$74,461 -$67,181 -$59,901 -$52,621 -$45,341 -$38,061 -$30,781 -$23,501 -$16,221 -$8,941 -$1,661 $5,619 $12,899 $20,179 $27,459

    Int. Exp. $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164Earnings -$100,905 -$93,625 -$86,345 -$79,065 -$71,785 -$64,505 -$57,225 -$49,945 -$42,665 -$35,385 -$28,105 -$20,825 -$13,545 -$6,265 $1,015 $8,295

    Inc. Tax $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $152 $1,244

    Net Inc. -$100,905 -$93,625 -$86,345 -$79,065 -$71,785 -$64,505 -$57,225 -$49,945 -$42,665 -$35,385 -$28,105 -$20,825 -$13,545 -$6,265 $862 $7,050

    * Price per member. Based on $140 per week fee** Direct cost of sales*** Gross Margin**** Earnings before interest and taxes Interest Expense Income Tax

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    Revenue

    # of Units 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

    Price/mem* $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280 $7,280

    Revenue $232,960 $240,240 $247,520 $254,800 $262,080 $269,360 $276,640 $283,920 $291,200 $298,480 $305,760 $313,040 $320,320 $327,600 $334,880 $342,160

    COS** $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

    G.M.*** $232,960 $240,240 $247,520 $254,800 $262,080 $269,360 $276,640 $283,920 $291,200 $298,480 $305,760 $313,040 $320,320 $327,600 $334,880 $342,160

    G.M. % 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

    Expenses

    Oper. Ex. $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $198,221 $ 198,221 $198,221 $198,221 $198,221 $198,221

    EBIT**** $34,739 $42,019 $49,299 $56,579 $63,859 $71,139 $78,419 $85,699 $92,979 $100,259 $107,539 $114,819 $122,099 $129,379 $136,659 $143,939

    Int. Exp. $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164 $19,164

    Earnings $15,575 $22,855 $30,135 $37,415 $44,695 $51,975 $59,255 $66,535 $73,815 $81,095 $88,375 $95,655 $102,935 $110,215 $117,495 $124,775

    Inc. Tax $2,336 $3,428 $4,520 $5,612 $6,704 $7,994 $9,814 $11,634 $13,454 $15,822 $18,297 $20,773 $23,395 $26,234 $29,073 $31,912

    Net Inc. $13,238 $19,426 $25,614 $31,802 $37,990 $43,981 $49,441 $54,901 $60,361 $65,272 $70,077 $74,882 $79,540 $83,981 $88,422 $92,863

    Revenue

    # of Units 48 49 50

    Price/mem* $7,280 $7,280 $7,280

    Revenue $349,440 $356,720 $364,000

    COS** $0 $0 $0

    G.M.*** $349,440 $356,720 $364,000

    G.M. % 100% 100% 100%

    Expenses

    Oper. Ex. $198,221 $198,221 $198,221

    EBIT**** $151,219 $158,499 $165,779

    Int. Exp. $19,164 $19,164 $19,164

    Earnings $132,055 $139,335 $146,615Inc. Tax $34,751 $37,591 $40,430

    Net Inc. $97,303 $101,744 $106,185

    * Price per member. Based on $140 per week fee** Direct cost of sales*** Gross Margin**** Earnings before interest and taxes Interest Expense Income Tax

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    VIII.D. Income Statement Calculations

    Retirement Home Details

    Depreciation (MACRS Schedule)39

    Retirement Home Year 1 Year 2 Year 3

    AssetDepreciable

    BaseMACRS % Depreciation MACRS % Depreciation MACRS % Depreciation

    Building(20yr)

    $400,000 3.75% $15,000 7.22% $28,876 6.68% $26,708

    Furniture /Fixtures /

    Appliances(7yr)

    $55,000 14.29% $7,860 24.49% $13,470 17.49% $9,620

    IT (5yr) $2,000 20.00% $400 32.00% $640 19.20% $384Vans (3yr) $20,000 33.33% $6,666 44.45% $8,890 14.81% $2,962Total $29,926 $51,876 $39,674

    Utilities Retirement Home Year 1 Year 2 Year

    Water $480 $494 $514Phone Line $2,000 $2,060 $2,142Electricity $2,000 $2,060 $2,142Trash Pickup $480 $494 $514Natural Gas $1,200 $1,236 $1,285Internet $480 $494 $514Total $6,640 $6,839 $7,113

    Income Tax40 Retirement Home Year 1 Year 2 Year 3

    TaxableIncome

    Tax Rate Income Tax Amount Income Tax Amount Income Tax Amount

    under 0 0% $0 $0 $0 $0 $0 $00 - 50,000 15% $6,560 $984 $3,559 $534 $37,809 $5,67150,000 -75,000

    25% $0 $0 $0 $0 $0 $0

    75,000 -100,000

    34% $0 $0 $0 $0 $0 $0

    100,000 -335,000

    39% $0 $0 $0 $0 $0 $0

    335,000 -10,000,000

    34% $0 $0 $0 $0 $0 $0

    10,000,000 -15,000,000 35% $0 $0 $0 $0 $0 $0

    15,000,000 -18,333,333

    38% $0 $0 $0 $0 $0 $0

    Total $984 $534 $5,671

    Source of Revenue Retirement HomeRent per resident (per month) $1,279

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    Interest Expense Table Retirement Home

    Month Payment Interest Principal BalanceAnnual

    Interest TotalAnnual

    Principal Paid0 $519,1671 $4,025 $3,028 $997 $518,1702 $4,025 $3,023 $1,002 $517,168

    3 $4,025 $3,017 $1,008 $516,1594 $4,025 $3,011 $1,014 $515,1455 $4,025 $3,005 $1,020 $514,1256 $4,025 $2,999 $1,026 $513,0997 $4,025 $2,993 $1,032 $512,0678 $4,025 $2,987 $1,038 $511,0299 $4,025 $2,981 $1,044 $509,985

    10 $4,025 $2,975 $1,050 $508,93511 $4,025 $2,969 $1,056 $507,87812 $4,025 $2,963 $1,062 $506,816 $35,950 $12,35113 $4,025 $2,956 $1,069 $505,74714 $4,025 $2,950 $1,075 $504,67215 $4,025 $2,944 $1,081 $503,591

    16 $4,025 $2,938 $1,087 $502,50417 $4,025 $2,931 $1,094 $501,41018 $4,025 $2,925 $1,100 $500,31019 $4,025 $2,918 $1,107 $499,20320 $4,025 $2,912 $1,113 $498,09021 $4,025 $2,906 $1,120 $496,97022 $4,025 $2,899 $1,126 $495,84423 $4,025 $2,892 $1,133 $494,71224 $4,025 $2,886 $1,139 $493,572 $35,058 $13,24425 $4,025 $2,879 $1,146 $492,42626 $4,025 $2,872 $1,153 $491,27427 $4,025 $2,866 $1,159 $490,11528 $4,025 $2,859 $1,166 $488,948

    29 $4,025 $2,852 $1,173 $487,77630 $4,025 $2,845 $1,180 $486,59631 $4,025 $2,838 $1,187 $485,40932 $4,025 $2,832 $1,194 $484,21633 $4,025 $2,825 $1,201 $483,01534 $4,025 $2,818 $1,208 $481,80835 $4,025 $2,811 $1,215 $480,59336 $4,025 $2,803 $1,222 $479,371 $34,100 $14,201

    Loan Retirement HomeLoan Term (Years) 20Annual Percentage Yield (APY) Interest Rate 7.00 %

    Loan Principal $519,167

    Anticipated Inflation Rate41 Retirement HomeYear 1 to Year 2 3.00 %Year 2 to Year 3 4.00 %

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    Autism Center Details

    Depreciation (MACRS Schedule)42 Autism Center Year 1 Year 2 Year 3

    AssetDepreciable

    BaseMACRS % Depreciation MACRS % Depreciation MACRS % Depreciation

    Building(20yr) $200,000

    3.75% $7,500 7.22% $14,438 6.68% $13,354

    Furniture /Fixtures /

    Appliances(7yr) $26,000

    14.29% $3,715 24.49% $6,367 17.49% $4,547

    IT (5yr) $3,000 20.00% $600 32.00% $960 19.20% $576Vans (3yr) $20,000 33.33% $6,666 44.45% $8,890 14.81% $2,962Total $18,481 $30,655 $21,439

    Utilities Autism Center Year 1 Year 2 Year

    Water $480 $494 $514

    Phone Line $2,000 $2,060 $2,142Electricity $2,000 $2,060 $2,142Trash Pickup $480 $494 $514Natural Gas $1,200 $1,236 $1,285Internet $480 $494 $514Total $6,640 $6,839 $7,113

    Income Tax43 Autism Center Year 1 Year 2 Year 3

    TaxableIncome

    Tax Rate Income Tax Amount Income Tax Amount Income Tax Amount

    under 0 0% $0 $0 $0 $0 $0 $0

    0 - 50,000 15% $50,000 $7,500 $50,000 $7,500 $50,000 $7,50050,000 -75,000

    25% $23,815 $5,954 $25,000 $6,250 $25,000 $6,250

    75,000 -100,000

    34% $0 $0 $18,989 $6,456 $25,000 $8,500

    100,000 -335,000

    39% $0 $0 $0 $0 $34,295 $13,375

    335,000 -10,000,000

    34% $0 $0 $0 $0 $0 $0

    10,000,000 -15,000,000

    35% $0 $0 $0 $0 $0 $0

    15,000,000 -18,333,333

    38% $0 $0 $0 $0 $0 $0

    Total $13,454 $20,206 $35,625

    Source of Revenue Autism CenterFee per member (per week) $140

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    Confidential Information of HCA & Company Z 37

    Interest Expense Table Autism Center

    Month Payment Interest Principal BalanceAnnual

    Interest TotalAnnual

    Principal Paid0 $276,7501 $2,146 $1,614 $531 $276,2192 $2,146 $1,611 $534 $275,684

    3 $2,146 $1,608 $537 $275,1474 $2,146 $1,605 $541 $274,6065 $2,146 $1,602 $544 $274,0636 $2,146 $1,599 $547 $273,5167 $2,146 $1,596 $550 $272,9658 $2,146 $1,592 $553 $272,4129 $2,146 $1,589 $557 $271,856

    10 $2,146 $1,586 $560 $271,29611 $2,146 $1,583 $563 $270,73312 $2,146 $1,579 $566 $270,166 $19,164 $6,58413 $2,146 $1,576 $570 $269,59714 $2,146 $1,573 $573 $269,02415 $2,146 $1,569 $576 $268,447

    16 $2,146 $1,566 $580 $267,86817 $2,146 $1,563 $583 $267,28418 $2,146 $1,559 $586 $266,69819 $2,146 $1,556 $590 $266,10820 $2,146 $1,552 $593 $265,51521 $2,146 $1,549 $597 $264,91822 $2,146 $1,545 $600 $264,31823 $2,146 $1,542 $604 $263,71424 $2,146 $1,538 $607 $263,107 $18,688 $7,06025 $2,146 $1,535 $611 $262,49626 $2,146 $1,531 $614 $261,88127 $2,146 $1,528 $618 $261,26328 $2,146 $1,524 $622 $260,642

    29 $2,146 $1,520 $625 $260,01630 $2,146 $1,517 $629 $259,38831 $2,146 $1,513 $633 $258,75532 $2,146 $1,509 $636 $258,11933 $2,146 $1,506 $640 $257,47934 $2,146 $1,502 $644 $256,83535 $2,146 $1,498 $647 $256,18836 $2,146 $1,494 $651 $255,537 $18,178 $7,570

    Loan Autism CenterLoan Term (Years) 20Annual Percentage Yield (APY) Interest Rate 7.00 %

    Loan Principal $276,750

    Anticipated Inflation Rate44 Autism CenterYear 1 to Year 2 3.00 %Year 2 to Year 3 4.00 %

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    Confidential Information of HCA & Company Z 38

    IX. References1The Brookings Institution. Getting Current. Recent Demographic Trends in Metropolitan America. 2009 2 Ibid.3Marigny Research Group, Inc. The U.S. Mature Market June 2000 4

    US Census Bureau. The Older Population in the United States: 2008. June 2009

    5FightingAutism. Somewhere Area Public Schools Autism Prevalence Report School Years 19922003November 20046Datamonitor. Real Estate Management & Development in the United States. Industry Profile. March 2007. 7Philip M. Parker, The 2007-2012 Outlook for Residential Real Estate Management in the United States.INSEAD, 2006, www.icongroup.com.8Mergent, Inc. The North America Property & Development Sectors January 2007 9Mergent, Inc. The North America Property Sections January 2009 10 http://mpdc.dc.gov/mpdc/cwp/view,a,1239,q,561242,mpdcNav_GID,1523,mpdcNav,|.asp (Accessed June 25th,2009)11 http://www.fbi.gov/ucr/cius2007/data/table_04.html(Accessed June 25th, 2009)12Mergent, Inc. The North America Property & Development Sectors January 2007 13 Ibid.14Mergent, Inc. The North America Property Sections January 2009 15Brookings Institution. Getting Current: Recent Demographic Trends in Metropolitan America 16http://fightingautism.org/idea/autism-state-rankings-prevalence.php (Accessed June 25th 2009)17 Ibid.18 http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ACS&_submenuId=&_lang=en&_ts=(Accessed July 1st, 2009)19 http://aspe.hhs.gov/poverty/09poverty.shtml(Accessed July 1st, 2009)20 http://www.community-partnership.org/docs/The%20Future%20of%20Permanent%20Supportive%20Housing%20in%20DC.pdf(AccessedJuly 1st, 2009)21

    Alex Johnson, Mortgage Crisis Inflicts Collateral Damage Msnbc.com

    http://www.msnbc.msn.com/id/22246203/(Accessed July 3rd, 2009)22 Johnson, Emma. "Senior Class."Journal of Property Management V. 72 No. 5 (September/October 2007) P. 41-5,72.5 (2007): 41-45.23

    ww.washingtonpost.com/wp-dyn/.../AR2009040303169.html (Accessed June 26th

    , 2009)24http://www.care.com/special-need-....html(Accessed June 26th, 2009)25 http://www.snacknyc.com/(Accessed June 26th, 200926Datamonitor. Real Estate Management & Development in the United States. Industry Profile. March 2007. 27Datamonitor. Ventas, Inc. Company Profile. July 200828Datamonitor. Sunrise Senior Living, Inc. Company Profile. June 2008 29 www.EagletonSchool.com (Accessed June 26th, 2009)30 http://www.twinklingeyedaycenter.com/(Accessed June 26th, 2009)31 http://autism.healingthresholds.com/news/day-care-center-caters-to-childr (Accessed June 26th, 2009)32 www.theauburnschool.org (Accessed June 26th, 2009)33Landlord rules 101: Get the right insurance policy. The Salt Lake Tribune. Aug 08, 2009.http://www.sltrib.com/realestate/ci_12982364.(Accessed Aug 16, 2009).34Landlord rules 101: Get the right insurance policy. The Salt Lake Tribune. Aug 08, 2009.

    http://www.sltrib.com/realestate/ci_12982364.(Accessed Aug 16, 2009).35 2008 Ford E-350. http://www.automotive.com/2008/09/ford/e-350/index.html. (Accessed Aug 16, 2009).36 Ibid.37 Janitorial Services Price Quote. ABM Janitorial Services. August 14 2009. www.abm.com.38 Ibid.39MACRS.http://en.wikipedia.org/wiki/MACRS. (Accessed Aug 16, 2009).40Corporate and Individual Tax Data, 2009.http://www.smbiz.com/sbrl001.html. (Accessed Aug 16, 2009).41Consumer Price Index for All Urban Consumers. Economic Research: Federal Reserve Bank of St. Louis.http://research.stlouisfed.org/fred2/series/CPIAUCNS.(Accessed Aug 16, 2009).42MACRS.http://en.wikipedia.org/wiki/MACRS. (Accessed Aug 16, 2009).

    http://www.icongroup.com/http://mpdc.dc.gov/mpdc/cwp/view,a,1239,q,561242,mpdcNav_GID,1523,mpdcNav,%7C.asphttp://www.fbi.gov/ucr/cius2007/data/table_04.htmlhttp://fightingautism.org/idea/autism-state-rankings-prevalence.phphttp://fightingautism.org/idea/autism-state-rankings-prevalence.phphttp://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ACS&_submenuId=&_lang=en&_ts=http://aspe.hhs.gov/poverty/09poverty.shtmlhttp://www.community-partnership.org/docs/The%20Future%20of%20Permanent%20Supportive%20Housing%20in%20DC.pdfhttp://www.community-partnership.org/docs/The%20Future%20of%20Permanent%20Supportive%20Housing%20in%20DC.pdfhttp://www.msnbc.msn.com/id/22246203/http://www.care.com/special-need-....htmlhttp://www.care.com/special-need-....htmlhttp://www.care.com/special-need-....htmlhttp://www.snacknyc.com/http://www.eagletonschool.com/http://www.twinklingeyedaycenter.com/http://autism.healingthresholds.com/news/day-care-center-caters-to-childrhttp://www.theauburnschool.org/http://www.sltrib.com/realestate/ci_12982364http://www.sltrib.com/realestate/ci_12982364http://www.automotive.com/2008/09/ford/e-350/index.htmlhttp://en.wikipedia.org/wiki/MACRShttp://en.wikipedia.org/wiki/MACRShttp://www.smbiz.com/sbrl001.htmlhttp://www.smbiz.com/sbrl001.htmlhttp://research.stlouisfed.org/fred2/series/CPIAUCNShttp://en.wikipedia.org/wiki/MACRShttp://en.wikipedia.org/wiki/MACRShttp://en.wikipedia.org/wiki/MACRShttp://research.stlouisfed.org/fred2/series/CPIAUCNShttp://www.smbiz.com/sbrl001.htmlhttp://en.wikipedia.org/wiki/MACRShttp://www.automotive.com/2008/09/ford/e-350/index.htmlhttp://www.sltrib.com/realestate/ci_12982364http://www.sltrib.com/realestate/ci_12982364http://www.theauburnschool.org/http://autism.healingthresholds.com/news/day-care-center-caters-to-childrhttp://www.twinklingeyedaycenter.com/http://www.eagletonschool.com/http://www.snacknyc.com/http://www.care.com/special-need-....htmlhttp://www.msnbc.msn.com/id/22246203/http://www.community-partnership.org/docs/The%20Future%20of%20Permanent%20Supportive%20Housing%20in%20DC.pdfhttp://www.community-partnership.org/docs/The%20Future%20of%20Permanent%20Supportive%20Housing%20in%20DC.pdfhttp://aspe.hhs.gov/poverty/09poverty.shtmlhttp://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ACS&_submenuId=&_lang=en&_ts=http://fightingautism.org/idea/autism-state-rankings-prevalence.phphttp://www.fbi.gov/ucr/cius2007/data/table_04.htmlhttp://mpdc.dc.gov/mpdc/cwp/view,a,1239,q,561242,mpdcNav_GID,1523,mpdcNav,%7C.asphttp://www.icongroup.com/
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    43Corporate and Individual Tax Data, 2009.http://www.smbiz.com/sbrl001.html. (Accessed Aug 16, 2009).44Consumer Price Index for All Urban Consumers. Economic Research: Federal Reserve Bank ofSt. Louis.http://research.stlouisfed.org/fred2/series/CPIAUCNS.(Accessed Aug 16, 2009).

    http://www.smbiz.com/sbrl001.htmlhttp://www.smbiz.com/sbrl001.htmlhttp://research.stlouisfed.org/fred2/series/CPIAUCNShttp://research.stlouisfed.org/fred2/series/CPIAUCNShttp://www.smbiz.com/sbrl001.html