Scenario / Instructions:
Please prepare a 5 year proforma income statement based on the following assumptions:
ABC Co. is being purchased by New Co.
Visits are expected to grow by 10% per year
New Co. expects to receive $5 more per visit than ABC Co. receives
The business operates 255 working days out of the calendar year
FTE capacity is 5.5 visits per FTE per working day. If productivity exceeds this threshold than 1 FTE will need to be added in each year where productivity exceeds this threshold
New Co. expects inflation to be 3% per year on all expenses
Benefit Expense as a % of salary is expected to increase by 10% over the current rate paid by ABC co.
New Co. has existing space they plan to move the business into which will save $20,000 in rent expense
New Co. expects to be able to save 20% per visit in supply costs over what ABC co. currently pays in supplies per visit
ProformaABC Co. Most Recent Full YearYear 1Year 2Year 3Year 4Year 5Visits10,000revenue950,000ExpensesSalaries700,000Benefits140,000Rent80,000Supplies10,000Total Expenses930,000Net Income20,000Current FTEs10