Mergers & Acquisitions Advisory

Quality of Earnings Analysis

Earnings Quality refers to the amount of earnings that result from higher revenues or lower expenses.  When earnings are driven by the core operations of your business, we would classify them as high quality.  On the contrary, elevated earnings from changing accounting conventions or rising inflation, for example, would be deemed low quality.  Our advisors are able to carefully dissect your earnings so you can be confident in the quality and strength of your practice's net income. 

Pro Forma EBITDA Consulting

A thorough Pro Forma EBITDA analysis provides valuable information not only to potential buyers but also to your business as you work through the sale of your practice. Acquirers can see what your practice is capable of earning and forecast what their financials will look like post-sale.  From your business' perspective, implementing efficiencies in salary structure, rental contracts, or medical supply inventories can improve current operations as well as increase the value of your practice for acquisition. 

Purchase Price Adjustment Review

When a physician sells their practice, they are not just selling a going concern; rather, they are selling a balance sheet with values captured at some past reporting date.  They are also selling a future stream of earnings to the acquirer.  However, the time between signing a deal and closing a deal can see substantial changes in these amounts.  If financial conditions have improved for the seller, they should be able to recognize that in a higher sale price.  A diligent review of these changes allows for a final purchase price to reflect your true financial position.

Cash Flow Assessments

While closely related to earnings and profitability, your cash flow statement illustrates a slightly different picture:  the inflows and outflows of cash due to operating, investing, and financing activities.  In this context, we are differentiating between liquidity and solvency.  A critical aspect of our analysis is forecasting the amount and timing of these cash flows so that any future surplus or deficit periods can be identified, and proper investment or savings strategies can be implemented.

Normalized EBITDA Analysis

When considering the sale of your practice, EBITDA is one of the most important financial measures a potential acquirer will consider.  Not only are deals often priced on a multiple of EBITDA, but your earnings capacity, and the longevity of those earnings, are components you want to highlight when marketing your practice for sale.  Therefore, removing any one-time events or non-recurring revenues and expenses allows a buyer to see the future earnings they can expect from your business.

Operational Metrics/Key Business Drivers

Well-developed benchmarks for key business drivers act as your compass in an ever-changing healthcare environment.  Even as business fluctuates, clear goals and guidelines for income and expense categories are paramount.  Are medical supplies, rent, or salaries too high a percentage of overall expenses? How do deviations from these benchmarks affect your profitability? MedCPA uses industry best practices to identify proper benchmarks for your business, and work to implement strategies to keep you moving towards profitability. 

Quality of Assets Evaluation

Your company's balance sheet is a snapshot in time of your assets, liabilities, and partner equity. However, it often takes a subjective approach to fully analyze and evaluate the quality of assets held.  Are increasing receivables a sign of rising sales or slowing collections? Do fixed asset trends signal large upcoming capital expenditures? These, among others, are considerations that will help acquirers understand the true financial health of your practice.

Working Capital Analysis

A working capital analysis allows you to understand the operational efficiency and short-term financial health of your business.  It provides clarity on how well your company is utilizing its assets.  While often defined by a simple equation (current assets minus current liabilities), it is important to examine how these amounts change over time, and what those changes imply in regards to company valuation.  Simply, how do these changes in working capital affect your practice's free cash flows?

Forecast Analysis

Whether your practice is preparing for sale or just focused on improving future operations, an accurate forecast analysis allows you to make informed decisions moving forward.  MedCPA analyzes past growth trends and helps implement new drivers for growth. Such considerations range from switching to accrual reporting, a restructuring of payment collections, or looking to add new providers.  Understanding how these different scenarios will affect your financials can provide the quantitative support you need in making these difficult decisions.

Valuation Advisory

financial reporting

High quality financial reporting allows the reader to make sound judgments about the current state of your business, and it must also withstand the scrutiny of auditors and regulators.  As you have invested considerable time and resources into growing your practice, there have also been added complexities to reporting and compliance standards. To adhere to these standards, you need a valuation professional who understands accurate financial statement preparation.  MedCPA provides a full range of fair value and financial reporting services as well as purchase price allocation, impairment testing, and stock-based compensation analysis for your practice.

Transaction Support

Determining the highest value for your practice is necessary in a number of circumstances.  You may be considering a merger or acquisition, the addition of a new partner, or implementing an employee stock option plan (ESOP), for example.  In each of these, it takes a thorough analysis of the business and its assets as well as comprehensive insight into the accounting and tax implications to truly value your practice through a transaction.  Our advisors at MedCPA work closely with clients through all, or specific parts, of a transaction to make sure they understand the financial drivers impacting cash flows and value.

Marital Dissolution

Valuing a business through divorce has become an increasingly common reason for seeking professional valuation advice.  In many marital dissolution cases, not only is the professional practice one of the most complex assets to value, but it typically also represents the greatest part of the family's asset base and income stream.  Additionally, there are added complexities surrounding the valuation process when dealing with 'marital property' versus 'separate property' as well as defining and measuring goodwill.  MedCPA prides itself on delivering accurate and defensible valuation opinions for its clients throughout the dissolution process.

Accounting & Tax Services

Accounting & Tax Advisory

You have built a successful practice by providing your patients with an exceptional level of care.  You have created a service model that not only benefits your customers but one that also benefits your bottom line.  When it comes to growing your practice, however, you may need to consider adding efficiencies to your financial and accounting operations.  MedCPA works with clients to relieve the pressure that comes with financial reporting and accounting functions.  We offer fully-tailored CFO advisory services, management accounting services, and quality control processes for your reporting requirements so that your patients remain the center of your focus.

Business Consulting

Whether you are in the process of growing your practice, or you are beginning to market your practice for sale, it is important that you have a complete financial picture of your business.  However, determining these financial insights from your accounting systems can be a time-consuming and confusing task.  MedCPA works with their clients to provide this financial clarity through timely and targeted consulting services.  This may include cash flow forecasts so that management can anticipate future opportunities or threats.  It may also include process improvements to your accounting systems.  Our advisors offer tailored solutions to your practice so you get the information you need.  

Disputes, Valuations & Forensics

We understand that business disputes typically arise out of complex circumstances, with each being unique in its own right.  Our advisors are skilled in analyzing financial information to best assist you is resolving your dispute.

Commercial Dispute Resolution

Successfully navigating through a business dispute requires skilled and experienced advisors who understand the complexities of each case.  There are numerous reasons that business disputes could arise, including business interruptions, purchase price earn-outs, breach of fiduciary duty, or intellectual property infringement.  Working alongside our clients' legal advisors, MedCPA provides effective and timely analysis of financial information and business information systems to assist in making sure your disputes are resolved efficiently. 

additional Dispute & Forensic Services

Additional services our advisors provide to clients include:

• Estate & Trust Matters

• Shareholder Disputes

• Corporate Dissolution

• Lost Profits, Wages, and Earnings