Financial Analysis techniques in the case of Ambulatory Surgery Center (ASC)

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Business Finance

Description

This assignment is a project to create the financial projection portion of a business plan that is based on a hypothetical situation at John Muir Medical Center. It is to include pro forma financial statements, including income statement, cash projection schedule, and balance sheet. Uses appropriate accounting method for industry and form of business. It provides realistic potential sales and earnings figures.

Ambulatory Surgery Center (ASC)

Background:

You are a project manager for a 300-bed community hospital with a 100-physician medical group consisting of primary care and specialty physicians including 20 surgeons of various specialties. Included in this are four well known and respected orthopedic surgeons who contribute significantly to the hospital’s surgery volumes. Senior leadership of the hospital has asked you to put together a proposal for the addition of an outpatient surgery center to be constructed in a new space attached to the hospital.

Important factors for consideration in your proposal include:

Patient flow

Number of rooms needed

Operating room (OR) equipment

Sterilization equipment

Office equipment

Construction factors: contractor selection, timelines, permitting, licensing, architecture and interior design, etc.

Volumes lost in main OR versus volume gain from outpatient environment and increased capacity

Staffing

oMake the following assumptions per operating room:

§One RN

§One scrub tech

§Four pre-op RNs

§Four post-op RNs

§Two registration clerks

§One custodian

§Two sterilization clerks

Registration process

Pre-op process

Post-op process

Coding/billing process

Physician space (Changing rooms, workspace for paper work)

Staff space (Changing rooms, break room)

Effects of political aspects of meeting physician needs on both the surgery center’s performance and that of the main OR in the hospital. Also, any that may occur between surgical specialists.

Financial impacts of an ASC

Trend analysis: are ambulatory surgery centers a growing or diminishing trend?

Typical competition of an ASC

Should it be attached to the hospital, etc?

Marketing – who are major audiences?

Training

Certification

**This is what has been created so far, but feel free to edit and explain as you see fit:

The profit and loss spreadsheet is based upon an average cost of approximately $5,500, and a cost of services estimated at approximately $4,125. Financial projections will be based upon a typical Ambulatory Surgery Center Schedule of Mondays through Fridays, with an average of 5.5 surgeries per day. A projected growth in revenue is estimated at approximately 5% a year over the next three years, assuming a growth in operations conducted and range of operations serviced.

For staffing assumptions, eight registered nurses are expected to work full-time at the facility, with the possibility of hiring more staff as needed for potential growth. Registered nurses average at approximately $35 for the surrounding area. Assumptions for other staff (surgeons, clerks, custodians, scrub techs, etc), will be based upon the average hourly rate for the position and area.

Year 1

Year 2

Year 3

Sales

$7,260,000

$7,623,000

$8,004,150

Costs/Goods Sold

$5,445,000

$5,717,250

$6,003,113

GROSS PROFIT

$1,815,000

$1,905,750

$2,001,037

Salary (Office & Overhead)

$1,079,656

$1,079,656

$1,079,656

Payroll (taxes, etc.)

$43,186

$43,186

$43,186

Repairs & Maintenance

$3,125

$3,125

$3,125

Advertising

$1,200

$1,000

$1,000

Rent

$24,750

$24,750

$24,750

Other expenses

$12,000

$5,200

$5,200

TOTAL EXPENSES

$1,163,917

$1,156,917

$1,156,917

NET PROFIT (before taxes)

$651,083

$748,833

$844,120

NET PROFIT (after tax)

$651,083

$748,833

$844,120

ADJUSTED TO RETAINED

$651,083

$748,833

$844,120

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Explanation & Answer

Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the workGood luck in your study and if you need any further help in your assignments, please let me knowCan you please confirm if you have received the work? Once again, thanks for allowing me to help youRMESSAGE TO STUDYPOOLNO OUTLINE IS NEEDED

Schedule 1

Required Start-Up Funds

Estimated Monthly Expenses
Column 1

Column 2

Number of Months
Your Estimate of Monthly
of Cash Required
Expenses Based on Sales
to Cover Expenses*
of $_________ Per Year

Item
Salary of Owner-Manager
All Other Salaries and Wages
Rent
Advertising
Delivery Expense/Transportation
Goods
Telephone, Fax, Internet Service
Other Utilities
Insurance
Taxes Including Employment Insurance
Interest
Maintenance
Legal and Other Professional Fees
Miscellaneous

Column 3
Cash Required To Start
Business (Column 1 X
Column 2)*

$75,000

3.00

$225,000

$125,000

3.00

$375,000

$45,031

3.00

$135,092

$83

3.00

$250

$3,500

3.00

$10,500

$488,390
$0
$433
$0

3.00
3.00
3.00
3.00

$1,465,170
$0
$1,300
$0

$3,599

3.00

$10,797

$0

3.00

$0

$260

3.00

$781

$0
$0

3.00
3.00

$0
$0

Total Cash Requirements for Monthly Recurring Expenses: (A)

$2,223,890

Start-up Costs You Only Have
to Pay Once
Cash Required to
Start Business

Capital Costs
Fixtures and Equipment
Decorating and Remodelling
Installation of Fixtures and Equipment
Starting Inventory

$500,000
$15,000
$20,000
$234,600

Deposits with Public Utilities
Legal and Other Professional Fees
Licenses and Permits
Advertising and Promotion for Opening
Accounts Receivable
Cash
Miscellaneous

$0
$0
$0
$1,000
$0
$0
$23,000

Soft Costs

Total One-Time Cash Requirements: (B)

$793,600

Total Estimated Cash Required to Start Business: (A) + (B)

$3,017,490

* You Will Have to Decide For Your Particular Business How Many Months You Expect Your Expenses to
Exceed Your Revenue So That You Will Have a Shortfall of Cash. This Should Somewhat Overestimate
Your Overall Cash Requirements and Provide You With a Safety Cushion In Case Sales Don't Materialize
As Rapidly As You Expected.

Year 1

Year 2

Sales

7523000.00 $8,004,150

Costs/Goods Sold

5717250.00 $6,003,113

GROSS PROFIT

1905750.00 $2,001,037

Salary (Office &
Overhead)
Payroll (taxes,
etc.)
Repairs &
Maintenance
Advertising
Rent
Other expenses
TOTAL
EXPENSES
NET PROFIT
(before taxes)
NET PROFIT
(after tax)
ADJUSTED TO
RETAINED

1079656.00 $1,079,656
43186.00 $43,186
3125.00 $3,125
1000.00 $1,000
23750.00 $24,750
5200.00 $5,200
1156917.00 $1,156,917
748833.00 $844,120
748833.00 $844,120
748833.00 $844,120

Year 3
800150.00

4161575.00

346797.9167

28900

6004113

5860681.50

488390.125

40699

20001

962875.50

80239.625

6687

1079

540367.50

45030.625

3753

43186

43186.00

3598.833333

300

3125

3125.00

260.4166667

1000

1000.00

83.33333333

7

24750

24250.00

2020.833333

168

5200

5200.00

433.3333333

36

1146917

1151917.00

95993.08333

7999

844120

796476.50

66373.04167

5531

844120

796476.50

66373.04167

5531

844120

796476.50

66373.04167

5531

22

SCHEDULE 2

Pro Forma Income Statement for
(Company) for the Year Ending (Date)
Month
1

1. Gross Sales
2. Less: Cash Discounts
A. NET SALES
Cost of Goods Sold:
3. Beginning Inventory
4. Plus: Net Purchases
5. Total Available for Sale
6. Less: Ending Inventory

626,917
0
$626,917

476,438
476,438
0

Month
2

626,917
0
$626,917

0
476,438
476,438
0

Month
3

626,917
0
$626,917

0
476,438
476,438
0

Month
4

626,917
0
$626,917

0
476,438
476,438
0

Month
5

626,917
0
$626,917

0
476,438
476,438
0

Month
6

626,917
0
$626,917

0
476,438
476,438
0

Month
7

626,917
0
$626,917

0
476,438
476,438
0

Month
8

626,917
0
$626,917

0
476,438
476,438
0

Month
9

626,917
0
$626,917

0
476,438
476,438
0

Month
10

626,917
0
$62...


Anonymous
This is great! Exactly what I wanted.

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