Opportunities
Home Health Care Agency With 234% ROI
With a 95% referral rate and 5-star Medicare rating!
Specifications
This private and locally owned home health care agency is 95% referral based and provides a variety of in-home care services like hygiene assistance, diet monitoring, housekeeping, errands, caring companionship, respite care, chronic and acute medical problems, post-surgical, and physical and speech therapy. Serving patients from pediatric to geriatric, this company is certified by the State of Iowa for Medicare and Medicaid and has a 5-star Medicare rating proving excellence from member satisfaction surveys, plans, and health care providers. With the current owner involved in 1% of the business operations and administrative work, the administrator handles the majority the operations. The company 28 qualified and trained personnel with a full-time business administrator, office manager, office assistant, and clinical manager, along with 2 full-time field nurses, 5 full-time home health aides, and 12 full-time W2 independent therapists. They also have a part-time care manager and field nurse with 3 part-time home health aides.
Serving 9 counties in Southeast Iowa, this company provides coverage for workman's comp claims and private pay and, for a client’s convenience, directly bill to their insurance company. They provide a safe, compassionate, innovative health care community that listens, learns, and responds collaboratively with patients, while maintaining a culture of care.
This business currently does not have active marketing, due to the already high capacity of patient care. A new owner could expand the service area and increase clientele with marketing and the hiring of more staff. There is also growth in the private sector. It is an area that is quite profitable when utilized correctly as there are no Medicare, CHAP, Medicaid rules and regulations to follow. This is for non-skilled services or contracted services. This deceases the overhead and workload for the nurses and office.
At the price of $223,000, a 10% down payment of $22,300 returns $52,210 in the first year after debt payments resulting in a 234% return on investment!
Business Highlights
- Revenue: $755,095
- Cash Flow: $80,966
- Year Established: 2014
- Location: Southeast Iowa
- Service Area: 9 counties in Iowa: Henry, Johnson, Washington, Jefferson, Louisa, Muscatine, Des Moines, Lee, and Van Buren.
- Clients: Any individual, of any age, in need of in-home care
- Services: In-home care—hygiene assistance, diet monitoring, housekeeping, errands, caring companionship, respite care, chronic and acute medical problems, post-surgical, physical and speech therapy, etc.
- Employees: 30 (24 FT, 6PT): 1 FT Business Administrator, 1 FT Office Manager, 1 PT Office, 1 FT Clinical Manager, 1 PT Care Manager, 2 FT Field Nurses, 1 PT Field Nurse, 6 FT Home Health Aids, 3 PT Home Health Aids, 13 FT Therapists
- Reason for Selling: Divestment
- Seller Training Period: Up to 6 months
Financial Highlights
- List Price: $223,000
- Cash Flow: $80,966
- Assets: $75,000+
- Vehicles: $53,494 – 8 Total
- Equipment: $10,000 – supplies, dressings, home bags, etc.
- Office Inventory: $15,500 – computers, desks, file cabinets, office furniture, etc.
*See additional asset information in the attachments
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | P&L Statement | P&L Statement | Notes |
| 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $755,095 | $696,879 | $656,518 | $899,641 | |
| Net Income Shown on Financial Statement | $4,534 | $-16,057 | $-65,155 | $64,732 | |
| ADDBACKS | |||||
| Compensation to Owner | $82,691 | $80,000 | $75,400 | $75,400 | |
| 11% Tax on total W2 Salaries | $9,096 | $8,800 | $8,294 | $8,294 | |
| Depreciation | $0 | $1,052 | $34,146 | $23,018 | |
| Interest | $345 | $9,900 | $11,497 | $7,324 | |
| Meals & Entertainment | $506 | $278 | $0 | $0 | |
| Cell Phone | $1,461 | $1,461 | $1,461 | $1,461 | |
| Amortization | $0 | $2,398 | $0 | $0 | |
| Employee Benefit (Retirement) | $1,508 | $1,508 | $2,398 | $2,398 | |
| COVID Income | $-19,175 | $0 | $1,508 | $1,508 | |
| TOTAL ADDBACKS | $76,432 | $105,397 | $134,704 | $119,403 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $80,966 | $89,340 | $69,549 | $184,135 | |
| Profit Margin | 10.72 % | 12.82 % | 10.59 % | 20.47 % |
Valuation
Funding Example
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 2020 Cash flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2020 Cash flow |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
| Document Title / Description |
|---|
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