Practice Valuation
Acquisition and Analysis
Practice Valuation
The Science of Dental Valuation
Assessing the value of a dental practice involves more than just looking at past financial figures. While these numbers reflect the history of the practice, they fail to provide a complete picture. They may indicate past profitability, but they offer little insight into the practice's future potential or the inherent risks involved.
In addition to standard metrics such as EBIT, EBIT ratios, and profitability indicators from previous years, we also explore key variables including:
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Variability of factors related to Net Sales (the relationship between sales and costs)
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Equipment inventory and usage ratio (considering the costs of potential replacement)
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Fitout valuation and assessment (evaluating potential refurbishment costs)
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Dentists Risk Score (assessing the financial risk of losing dentists)
When combined with profitability ratios, these factors offer a more precise risk-adjusted valuation of a dental practice.
Here is a sample Waterfall Chart that offers a quick overview of the clinic along with its valuation.
Waterfall Chart
Clinic Valuation