Promoter D.

r Biniya Solomon

Investment cost 21.16 million

Construction period Two years

Job created 20 citizens

1
Location Addis Ababa

Land requisition 1000 m2

2
 Table of contents

Contents pages
1. Executive Summary............................................................................................................. 3
2. Introduction................................................................................................................... 4
3. Promoter Background......................................................................................................5
4. Product Description and Application..........................................................................5
5. Market Study, Plant Capacity and Production Program................................................6
5.1 Market Study...................................................................................................................... 6
5.1.1 Present Demand and Supply...................................................................................... 6
A. Demand Analysis..................................................................................................................6
B. Supply Analysis...................................................................................................................7
6. Pricing and Distribution............................................................................................... 8
7. Plant Capacity....................................................................................................................... 8
8. Production Program......................................................................................................8
9. Raw Materials and Utilities.........................................................................................................9
9.1 Annual Requirement and Cost of Raw Materials and Utilities...................................................9
10. Technology and Engineering.......................................................................................................9
10.1 Production Process.....................................................................................................................9
10.2 Machinery and Equipment.......................................................................................................10
10.2 Furniture Cost Estimate...........................................................................................................11
10.3 Civil Engineering Cost............................................................................................11
11. 12
11. Organizational Structure and Human Resource...........................................................................12
A. Organizational Structure.................................................................................................12
B. Manpower Requirements....................................................................................................13
12. Financial Analysis........................................................................................................16
A. Underlying Assumption............................................................................................... 16
2. Depreciation........................................................................................................................16
3. Working Capital (Minimum Days of Coverage)...............................................................16
B. Investment................................................................................................................... 17
C. Production Costs.......................................................................................................... 18
D. Financial Evaluation.................................................................................................... 18
1. Profitability........................................................................................................................18
2. Breakeven Analysis...........................................................................................................19
3. Payback Period.................................................................................................................19
4. Simple Rate of Return......................................................................................................19
5. Internal Rate of Return and Net Present Value.............................................................19
6. Sensitivity Analysis...........................................................................................................19
E. Economic and Social Benefit and Justification...........................................................19
1. Profit Generation..............................................................................................................19
2. Tax Revenue............................................................................................................... 19
3. Employment and Income Generation.....................................................................20
4. Pro Environment Project................................................................................................20
Annex...................................................................................................................................................21

3
 1. Executive Summary

The envisage project proposal is to establish nursing home institution in Addis Ababa, with three
self-contained nursing blocks and one administrative and medication center G+ 4 structures. The
demand for the service is high because there is almost no nursing home in the city that can
provide the essential services for senior residents.

The overall initial investment requirement is anticipated to be birr 21 million, with building
construction accounting for 50.77 percent. Twenty people will be employed as a result of the
initiative; two of them will be unskilled.

With a 142 percent internal rate of return (IRR) and a net present value (NPV) of Birr
1,514,088.72 thousands discounted at 18 percent, the project is financially viable.

4
 2. Introduction

The ongoing war in Ethiopia’s northern part, as well as a lack of peace and security in other parts
of the nation is seen to be affecting the investment climate. Furthermore, the double-digit
inflation rate and high unemployment rate exacerbate the problem. However, as this critical
juncture, Ethiopia’s government is making every effort to keep both domestic and foreign direct
investments in the country. It is establishing ideal conditions to enable the private sector to
participate in practically all aspects of the economy, including health sector. The only way to
wipe out the critical challenges that country have, is through holistic growth and development.
And one of the techniques to achieve growth and development is promotion of investment. So,
that investment sector happens to be a determinant factor in the economic development of a
country, like Ethiopia
Ethiopia has a vast potential for development of various economic sectors. Although agriculture
is the mainstay of the country’s economy, the opportunity to invest in other sectors, like health is
substantial. Specifically nursing home is a new venture in metropolitan cities as of Addis Ababa.
Nursing homes are institutions where individuals who do not need to be in hospital and cannot be
cared at home can receive care. These institutions are equipped with trained nurses who aid the
patients through care giving and giving medication as prescribed by doctors or clinical officers.
Some nursing homes adopt hospital set-ups, also known as skilled nursing facility, with staff
members providing care, physical, occupational and speech therapy with nurses’ stations on
every floor. However, others have adopted a home set-up that gives patients a neighborhood
feeling with less official routines or schedules.
The world’s population is experiencing an increase in the number of older persons significantly
in recent years. According to the Department of Economic and Social Affairs of the United
Nations (2021), there were 901 million people aged 60 years and older worldwide in 2021.
Likewise, at an unprecedented pace, the Ethiopian - Population ages 65 years and above as of
share considerable proportion in the total population. In 2021, the population aged 65 years,
and above for Ethiopia was 3.6 %.

5
The population aged 65 years and above in Ethiopia increased from 2.8 % in 1972 to
3.6 % in 2021, growing at an average annual rate of 0.53%. It becomes one of the significant
transformations of the 21st century, and their number is expected to double. The increasing
number of older people due to improving life expectancy and falling fertility rates is also true in
the context of Ethiopia, particularly in urban areas. Provision for health services is one of the
primary concerns of senior citizens given that there is an increasing demand in their population.
However, there is a limited number of certified geriatricians and gerontologists in Addis Ababa
City, coupled with very limited geriatric health centers (both outpatient and hospital-based).
3. Promoter Background

The promoter, D.r Biniyam Solomon, has work experience in Private clinic and management
Medical business activities. During this time, the promoter gained vast knowledge and skill.
With this reliable experience, D.r Biniyam knows how to manage and lead any organization to
profit and also knows how to handle different challenges in the working environment. Moreover,
he has a very good reputation with banks and different financial organizations.
4. Product Description and Application

Basic home nursing services can be a valid way for elderly patients to maintain independence
even with a comprehensive treatment routine. This type of care is also effective in maintaining
positivity and a better quality of life, as it allows for clinical services in the comfort of the home.
Some of the basic services to expect from home nursing include:

 Rehabilitation treatments, including physical and cognitive or speech based

therapy
 Case management
 Medical and social counseling for patients and for family members
 Nutritional therapy, including gastric and esophageal tubes
 Infusion therapies, including dialysis
 Vaccinations and preventive services

6
  Wound care and post-operative oversight
 Palliative care and medication management
 Home safety education
 Drawing blood and running diagnostics
 Pain management techniques
 Resources for support and education
 Life saving techniques and measures
 Critical and acute care

Most nurses will also modify in home services to better fit the patient’s needs, so that the focus
can always be on the greatest benefit to the client. This often allows for some flexibility in
negotiating services that will be most applicable

5. Market Study, Plant Capacity and Production

Program
5.1 Market Study
5.1.1 Present Demand and Supply

A. Demand Analysis

The Ethiopian Central Statistics Agency (ESA) is the lead agency mandated to conduct a census
of the population in the country. According to CSA, in 2021, the population of Ethiopia is
projected at 117.88 million, up by 2.53% compared with 114.96 million in 2020. Ethiopia is
ranked 12th in terms of population and 27th in terms of population growth rate. There are 3.65
million births in Ethiopia in 2021. That is 10,014 per day, which ranks 8th. The crude birth rate
is 30.97 per 1000 people. There are 0.73 million deaths in Ethiopia in 2021. That is 1,993 per
day, which ranks 14th. The crude death rate is 6.16 per 1000 people. 25.59 million people live
in urban areas, which is 22.17% of Ethiopia's population. Ethiopia is ranked 219th in terms of
urbanization.

Addis Ababa, the capital city of Ethiopia, holds 527 square kilometers of area in Ethiopia. The
population density is estimated to be near 5,165 individuals per square kilometer available. The
city of Addis Ababa is the capital and largest city in the country

7
of Ethiopia. Located in the center of Ethiopia, Addis Ababa currently has a population of
3.8 million people in the urban area and 2.7 million people in its city area.

Nursing homes are one of the emerging health service venues in the country since Ethiopians’
senior citizen population is continuously growing. As of 2021, the population of senior citizens
(those who are 60 years old and above) living in Addis Ababa City is 180,811 or 5.52% of the
total population, which is 3,873,907. Since Addis Ababa City is the biggest city in the metro,
aging and public health services are mostly in demand but also insufficient due to the great
volume of senior citizens in the country. According to the 2015 report of Ministry of Health
(MOH) a total of 298 (7.76%) of Addis Ababa City residents from ages 60 and above suffer from
acute lower respiratory tract infection and pneumonia. This is one of the top 10 leading causes of
morbidity in the country. Aside from health concerns, there is an alarming number of elderly
who are reported as neglected, abandoned, and maltreated. In 2015, a total of 55 elderly were
reported under the same case, while a total of 20 elderly were reported.
B. Supply Analysis

Addis Ababa is the true primal city in Ethiopia in terms of population. Its population is 10 times
greater than the second most populous town, Mekele. The estimate also shows that females are
slightly more likely to be residents than males. The estimate shows a youthful population, with
those below 15 years of age constituting 24% of the total population. The proportion of the
young population of the city has been decreasing for some years, indicating low fertility that is
below replacement level. The high population growth rate observed in the past years is thus due
to high migration to the city seeking jobs and better education. The working age population is, by
contrast, quite robust; the population between the ages of 15 to 65 is 72% for Addis Ababa. The
elderly population share in the city is estimated to be 3.6%. According to a 2021 estimate, the
average family size is 3.9. (CSA, 2013).
Given that there are still no existing nursing homes in Addis Ababa City, Old age patients are
being treated in general hospitals, health centers, and clinics. A 2011 facilities and services atlas
by the central statistical agency (CSA, 2011) shows that Addis Ababa has 39 health centers and
28 health posts that are government run. There

8
 are also 359 private health clinics. There are 40 hospitals in the city. Though this group of people
needs critical follow-up and care, there are few institutions that deliver nursing home services in
the city. Generally, nursing home is almost a new venture to the city.
6. Pricing and Distribution
Pricing of nursing home services could be classified into three main categories, i.e. custodial
care -- like bathing; getting dressed, and eating; medical monitoring and treatments; and
physical, occupational, and respiratory therapists. In this regard, the daily average price by
category of service is given in table 2 below.
Table 2 Average price of service by category
Type of Service Unit Price in
Birr/day/person
custodial care -- like bathing, getting dressed, and eating 1200
Medical monitoring and treatments. 500
Physical, occupational, and respiratory therapists 150

7. Plant Capacity

Working days are assumed to be 365/year. The attainable capacity and revenue of the
proposed nursing homes for each category of service is estimated as follows.

Table 3 Capacity and Revenue of the nursing home by Categoryof Service in 365 days
Annual
Type of Service Quantity/ Capacit Revenue In Birr
day y
Custodial care -- like bathing, getting dressed, and eating 50 18250 21,900,000.00
Medical monitoring and treatments. 15 4500 2,250,000.00
Physical, occupational, and respiratory therapists 30 9000 1,350,000.00
25,500,000.00
8. Production Program

The service program of the proposed nursing home is assumed to start at 70% in the first year,
80% in the second year, and beginning from the third year it will render 100%

9
 of its capacity.

9. Raw Materials and Utilities

9.1 Annual Requirement and Cost of Raw Materials and Utilities

The cost of annual requirement of raw materials of the project is estimated as percentage of
the respective service revenue as indicated in table 4 bellow.
Table 4 Cost of raw materials as percentage of Revenue
Service Revenue Percentage% Cost
Custodial care -- like bathing, getting dressed, and 21,900,000.00 65 14,235,000.00
eating
Medical monitoring and treatments. 2,250,000.00 55 1,237,500.00
Physical, occupational, and respiratory therapists 1,350,000.00 10 135,000.00
Total 25,500,000.00 15,607,500.00

Utility cost of the project is estimated to be about Birr 300,000 per annum
10. Technology and Engineering
10.1 Production Process
The main processes of establishing nursing home include studying the market, securing land,
constructing buildings, equipping and furnishing the buildings and starting the operations of
the businesses.

10
 10.2 Machinery and Equipment

Machinery and equipment required for a nursing home could broadly be classifiedinto four
categories. These are;
S.No Item Quantity Cost Per Cost
Unit
A Safety Supplies
1 Walkers 25 14,000.00 350,000.00
2 Wheelchairs 50 8,315.00 415,750.00
3 Crutches 50 1,976.00 98,800.00
4 Bed alarms 60 15,000.00 900,000.00
5 Shower seats 60 2,324.00 139,440.00
B Patient Medical Supplies
1 Bedpans 60 1,331.00 79,860.00
2 Bed lifts 60 1,769.00 106,140.00
3 Nebulizer 1 6,000.00
6,000.00
4 Ultrasound Machine 1 120,000.00
120,000.00
5 Stretchers 20 10,000.00
200,000.00
6 Microscope 1 35,000.00
35,000.00
7 Endoscope, 5.5mm 1080P 1 15,000.00
15,000.00
8 SUPER DEAL Electric Lab 1 75,000.00
Laboratory Centrifuge 75,000.00
C Assessment Tools
1 Stethoscope 14 1,200.00 16,800.00
2 Pulse oxi meter 15 2,200.00 33,000.00
3 Thermometer 20 452.00 9,040.00
4 Blood pressure cuff 12 3,000.00 36,000.00
5 Scale 10 5,750.00 57,500.00
D Mental and Cognitive Health
Support
1 Books, CDs, and movies 100 200.00 20,000.00

11
 2 Tablets 40 3,500.00 140,000.00
3 Computers 12 35,000.00 420,000.00
4 Computer Games 40 600.00 24,000.00
Total Machinery and Equipment Cost 3,297,330.00

10.2 Furniture Cost Estimate

Listed in the table below are the furniture and other materials needed in putting up the
proposed geriatric health center.

S.No Item Quantity Cost Per Unit Product

1 Reception table 1 15,000 15,000

2 Television 2 22,500 45000

3 Chairs 25 3,000 75,000
4 Cabinet 5 10,000 50,000
5 Sofa 3 25,000 75,000
5,000 40,000
6 Table 8
300,000
Total Furniture Cost:

10.3 Civil Engineering Cost

A Modern nursing home will require about 1000m 2 of land, of which 450m2 is for the
construction of 3 self contend Nursing blocks , G+4 on 150 m2 of land for General Medication
and administration office, 400 m2 for recreation and play ground and parking,. Assuming that the
Nursing blocks will be constructed in Villa, the investment cost for the Nursing blocks 450 m2 is
about Birr 5,400,000.00 (Birr 12,000/m2), for General Medication and administration office
150m2 is about 3,750,000.00(Birr 25,000/m2) and for Recreation and play ground and Parking
400 m2 is Birr 1,600,000 (Birr 4,000/m2) . Land lease will be Birr 25 /m sq. The plant will require
additional Birr 100,000.00 for land preparation, which totals to about Birr 125, 000. 00. The
estimated total construction cost of the project is 10,875,000.00 which is the total sum of
(5,400,000.00 + 3,750,000.00+1,600,000 + 125, 000. 00).

12
Proposed Project Lay out sketch

11. Organizational Structure and Human Resource

A. Organizational Structure

The Nursing Home center’s organizational structure is organizational structure is presented

below

13
 Organizational Structure of Nursing Home

B. Manpower Requirements

The required manpower for the nursing homes center is based on the feasibility study is

Medical services

1. Geriatrician
The geriatricians shall attend to the health care needs of older out-patients who visit the

nursing homes. They are especially trained to cater the needs of the older people whom have

different conditions compared to other ages. Because of the scarcity of geriatrician and the

health center’s limited services, the promoter plan to hire a geriatrician that will be in charged

in the health consultations of older patients.

2. Community Psychologist
The community psychologist is in charge of the counseling of the olders’ families. This

counseling is to impart information to the families on how to take care of the elder members

of the family.

14
 3. Nursing services

1. Nurse
Nurses shall be responsible for giving constant care and assistance to geriatric patients. The

promoter is considering for four nurses. Unlike other health facilities who implement shifting

of health personnel such as nurses, the Nursing home center will only implement a single shift

per day as the facility will only be open from 8 in the morning to 5 in the afternoon.

2. Caregivers
The caregivers will assist in providing care for the older patients of the nursing home center.

The proposed number for this specific staff will be seven as each will be responsible for

giving care to an average of 10 patients a day.

Operations Management

Patients’ Assistance and Cash Operations

1. Administrative Officer (Front-Desk Personnel or Cash Clerk)

The administrative officer is responsible for guiding the patients in their inquiries during their

visit in the geriatric health center; he or she is mainly in- charge of collecting all the

payments from the geriatric health center’s clients.

Facilities Management

1. Administrative Aides (Utility workers or Janitors and Laundry Worker)

The health center’s administrative aides is composed of utility workers and laundry workers.

The utility workers is responsible for maintaining the cleanliness in the health center whilst

the laundry worker is in-charge of washing the linens, pillowcase, and curtains to promote

hygiene.

Security

15
 1. Security guards
He or she secures the premises, personnel and properties by patrolling around the health

center and inspecting every person who enters the facility.

Table 10: Personnel needed in a geriatric health center and their corresponding
compensation

Staff Numberof Monthly Total Monthly Annual Salary

Staff Salary Salary
per Staff

Geriatrician 1
15,000.00 15,000.00 180,000.00
Community Psychologist 1 12,000.00 12,000.00 144,000.00
Nurse II 4 6,000.00 24,000.00 288,000.00
Caregivers 7 4,500.00 31,500.00 378,000.00
Administrative Officer (Front Desk 1
Personnel or CashClerk II) 6,000.00 6,000.00 72,000.00

1 5000.00 5000.00 60,000.00

Accountant
1 3500.00 3500.00 42,000.00
Secretarial Receptionist
1 3500.00 3500.00 42,000.00
Clerks and purchaser
Administrative AideI (Utility Worker 1 6,000.00 6,000.00 72,000.00
I/Janitor)
Security Guards 2
3,000.00 6,000.00 72,000.00

Total 20 112,500
1,350,000.00

16
12. Financial Analysis

A. Underlying Assumption
The financial analysis of nursing home is based on the data provided in thepreceding chapters
and the following assumptions.
1. Construction and Finance

Construction period 2 year

Source of finance 40% equity and 60% loan

Tax holidays 2 years

Bank interest rate 18%

Discount for cash flow 18%

Value of land Based on lease rate of ANRS

Spare Parts, Repair & 3% of fixed investment

Maintenance
2. Depreciation
Building 5%

Machinery and equipment 10%

Office furniture 10%

Vehicles 20%

Pre-production (amortization) 20%

3. Working Capital (Minimum Days of Coverage)

Raw Material-Local 30 days

Raw Material-Foreign 120 days
Factory Supplies in Stock 30 days
Spare Parts in Stock and Maintenance 30 days

17
 Work in Progress 10 days
Finished Products 15 days
Accounts Receivable 30 days
Cash in Hand 30 days
Accounts Payable 30days

B. Investment

The total investment cost of the project including working capital is estimated at Birr
21.17 million as shown in table 7 below. The Owner shall contribute 40% of the
finance in the form of equity while the remaining 60% is to be financed by bank loan.

Table 7: Total initial investment

LC FC Total
Land preparation 100,000.00 100,000.00

Building 10,750,000.00 10,750,000.00

Office furniture 250,000.00 250,000.00
Lease 25,000.00 25,000.00

Vehicles 5,000,000.00 5,000,000.00

machinery & equipment 3,297,330.00 3,297,330.00

Total Fixed Investment 19,422,330.00 0.00 19,422,330.00

Pre production 250,000.00 250,000.00
Total Initial Investment 19,672,330.00 19,672,330.00
Working capital 1,500,000.00 0 1,500,000.00
Total 21,172,330.00 21,172,330.00

*Pre-production capital expenditure includes - all expenses for pre-investment studies, consultancy fee
during construction and expenses for company‘s establishment, project administration expenses,
commission expenses, preproduction marketing and interest expenses during construction.

18
 C. Production Costs
The summary of the nursing home service production costs at full capacity is show in Table 8.
The total production cost including depreciation will amount to about Birr 19,468,638.00. Of the
total production cost, raw materials will account for 80.1%.Financial Evaluation

Table 8 Production Costs

Total Production Cost at full Capacity

Items Cost
1. Raw materials 15,607,500.00
2. Utilities 300,000.00
3. Wages and Salaries 1,350,000.00
4. Spares and Maintenance 118,905.00
Factory costs 17,376,405.00
5. Depreciation 1,942,233.00
6. Financial costs 150,000.00
Total Production Cost 19,468,638.00

D. Financial Evaluation

1. Profitability
The financial projections made reveal that the project is economically viable and social
desirable. According to the income statement of the plant the project will generate profit
beginning from first year operation. Important ratios such as the percentage of net profit to
equity (return on equity) and net profit and interest on total investment (return on total
investment) are 347% and 30% in the first year and are gradually increasing.

19
 2. Breakeven Analysis
The breakeven point of the project is estimated by using income statement projection. The
plantbreaks evens at 25.7% of capacity utilization.
3. Payback Period
The Initial investment of the project will be recovered before the end of the third year operation
4. Simple Rate of Return
It is a ratio of net profit and interest to total capital invested for a single year at full capacityutilization.
Thus the simple rate of return of the project is about 28.1%

5. Internal Rate of Return and Net Present Value

Base on the cash fallow statement, the project is anticipated to have a net present value of Birr
1,514,088.72 when discounted at 18% discounting factor where as its IRR is 142%.
6. Sensitivity Analysis
An increase in costs of raw materials by 10% will not affect the profitability of the pant
E. Economic and Social Benefit and Justification

Based on the foregoing presentation and analysis, we can learn that the proposed project
possesses wide range of benefits that complement the financial feasibility obtained earlier. In
general the envisaged project promotes the socio-economic goals and objectives stated in the
strategic plan of Addis Ababa city. These benefits are listed as follows;
1. Profit Generation
The project is found to be financially viable and earns on average a profit of birr 4.1 million
per year and birr 20.5 million within five years. Such result induces the project promoters to
reinvest the profit which, therefore, increases the investment magnitude in the region.
2. Tax Revenue
In the project life under consideration, the region will collect about 5.25 million birr from
corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result

20
create additional fund for the regional government that will be used in expanding social and
other basic services in the region.
3. Employment and Income Generation
The proposed project is expected to create employment opportunity to 20 citizens of the
country. This would be one of the commendable accomplishments of the project.
4. Pro Environment Project
The proposed production process is environment friendly.

21
Annex

22
Kedron Nursing home's Notes
Peer Company Comparisons

Select Best
Company Company
A B Company C Comparison Projections
Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Accounts Receivable % of Rev 10.0% 10.0% 8.3% 8.3% 8.3% 8.3% 8.3%
Inventory % of Rev 15.0% 15.0% 8.3% 8.3% 6.7% 6.7% 6.7%
Accounts Payable % of Rev 8.0% 8.0% 8.7% 8.7% 8.7% 8.7% 8.7%
Working Capital % of Rev 16.0% 16.0% 7.9% 7.9% 6.3% 6.3% 6.3%
Net Fixed Assets % of Rev 9.0% 9.0% 106.6% 84.3% 56.0% 42.8% 27.8%
Current Ratio 2.3 2.3 (22.5) 3.4 5.1 6.3 7.4
Debt to Capital (LT Debt + Equity) 1.2 1.2 0.16 0.08 0.06 0.05 0.04

Profitability
Gross Profit % of Rev 30.0% 30.0% 34.0% 30.5% 27.6% 29.8% 36.2%
Sales & Marketing % of Rev 30.0% 11.0% 11.0% 11.0% 11.0% 11.0%
Research & Development % of Rev 30.0% 3.3% 3.3% 3.4% 3.9% 3.8%
General & Administration % of Rev 30.0% 3.0% 3.3% 3.7% 3.7% 4.0%
Operating Expenses % of Rev 40.0% 17.0% 17.3% 17.6% 18.1% 18.6% 18.8%
Earnings from Operations % of Rev 12.0% 12.0% 16.7% 12.9% 9.5% 11.2% 17.4%
EBIT % of Rev 12.0% 12.0% 16.5% 12.9% 9.5% 11.2% 17.4%
Depreciation % of Rev 3.0% 3.0% 12.9% 11.7% 9.2% 8.5% 6.9%
EBITDA % of Rev 14.0% 14.0% 29.3% 24.6% 18.7% 19.7% 24.3%
Net Earnings % of Rev 5.0% 5.0% 19.5% 15.0% 11.0% 13.6% 22.3%

Returns
Return on Assets 12.0% 12.0% 27.0% 11.4% 8.8% 10.6% 17.3%
Return on Equity 15.0% 15.0% 34.2% 14.2% 10.8% 12.7% 20.4%
Return on Capital (LT Debt +
Equity) 15.0% 15.0% 28.8% 13.0% 10.1% 12.0% 19.6%

Growth
Revenue Growth Rate - CAGR: 15.0% 15.0% 14.3% 33.8% 14.3% 31.2%
Net Earnings Growth Rate - CAGR: 12.0% 12.0% Negative Negative 40.6% 115.7%

2
Kedron Nursing home's
Revenue Projections
Years 1 to 5
Year 1 Year 2 Year 3 Year 4 Year 5
Cascodial service
Number of Units 11,200 12,800 16,000 18,000 22,000
Fee per Customer 1,200 1,200 1,300 1,350 1,500
Total 13,440,000 15,360,000 20,800,000 24,300,000 33,000,000
Medical monitoring and treatment
service
Number of Customers 3,150.00 3,600.00 4,500.00 4,500.00 4,500.00
Fee per Customer 500 500 500 500 500
Total 1,575,000 1,800,000 2,250,000 2,250,000 2,250,000

Physical, occupational, and respiratory

therapists
Number of Customers 6,300 7,200 9,000 9,000 9,000
Fee per Customer 150 150 150 150 150
Total 945,000 1,080,000 1,350,000 1,350,000 1,350,000

Net Revenue 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000

2
 Revenues by Months & Quarters
($)
Months Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 0 912,000 1,220,000 1,395,000 1,830,000
Month 2 0 912,000 1,220,000 1,395,000 1,830,000
Month 3 0 1,276,800 1,708,000 1,953,000 2,562,000
Total 1st Quarter 0 3,100,800 4,148,000 4,743,000 6,222,000
Month 4 798,000 1,094,400 1,464,000 1,674,000 2,196,000
Month 5 1,276,800 1,276,800 1,708,000 1,953,000 2,562,000
Month 6 1,596,000 1,276,800 1,708,000 1,953,000 2,562,000
Total 2nd Quarter 3,670,800 3,648,000 4,880,000 5,580,000 7,320,000
Month 7 1,596,000 1,459,200 1,952,000 2,232,000 2,928,000
Month 8 1,915,200 1,824,000 2,440,000 2,790,000 3,660,000
Month 9 2,394,000 1,824,000 2,440,000 2,790,000 3,660,000
Total 3rd Quarter 5,905,200 5,107,200 6,832,000 7,812,000 10,248,000
Month 10 1,915,200 2,006,400 2,684,000 3,069,000 4,026,000
Month 11 2,074,800 2,188,800 2,928,000 3,348,000 4,392,000
Month 12 135,000 2,188,800 2,928,000 3,348,000 4,392,000
Total 4th Quarter 4,125,000 6,384,000 8,540,000 9,765,000 12,810,000
Total for year 13,701,000 18,240,000 24,400,000 27,900,000 36,600,000

Average Revenue
by Month 1,330,000 1,520,000 2,033,333 2,325,000 3,050,000
by Quarter 3,990,000 4,560,000 6,100,000 6,975,000 9,150,000

2
Kedron Nursing home's
Cost of Revenues
Years 1 to 5
Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000

Cost of Revenue
Product A
Material Costs per Unit 546.00 14.00 11.00 10.00 9.00
Subcontact Costs per Unit 50.00 40.00 30.00 25.00 20.00
Total Direct Costs per Unit 546.00 624.00 780.00 780.00 780.00
Unit Sales 11,200 12,800 16,000 18,000 22,000
Total Direct Costs 6,115,200 7,987,200 12,480,000 14,040,000 17,160,000
Labor Costs 0 0 0 0 0
Total Direct Costs 6,115,200 7,987,200 12,480,000 14,040,000 17,160,000
Service B
Service Personnel Costs 0 0 0 0 0
Other Expenses
Salary Expenses 1,552,500 1,552,500 1,620,000 1,620,000 1,687,500
Depreciation 2,046,047 2,101,047 2,146,761 2,199,619 2,252,476
Utility Cost 150,000 200,000 300,000 300,000 450,000
System Costs 25,000 100,000 150,000 300,000 350,000

All other costs % of Revenue 4% 638,400 729,600 976,000 1,116,000 1,464,000

Total Cost of Revenues 10,527,147 12,670,347 17,672,761 19,575,619 23,363,976
% of Revenue 66.0% 69.5% 72.4% 70.2% 63.8%
Allocation of Cost of Revenue between:
Variable 6,753,600 8,716,800 13,456,000 15,156,000 18,624,000
Fixed 3,773,547 3,953,547 4,216,761 4,419,619 4,739,976
Total 10,527,147 12,670,347 17,672,761 19,575,619 23,363,976

2
 Cost of Revenues by Months & Quarters
($)
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 0 633,517 883,638 978,781 1,168,199
Month 2 0 633,517 883,638 978,781 1,168,199
Month 3 0 886,924 1,237,093 1,370,293 1,635,478
Total 1st Quarter 0 2,153,959 3,004,369 3,327,855 3,971,876
Month 4 526,357 760,221 1,060,366 1,174,537 1,401,839
Month 5 842,172 886,924 1,237,093 1,370,293 1,635,478
Month 6 1,052,715 886,924 1,237,093 1,370,293 1,635,478
Total 2nd Quarter 2,421,244 2,534,069 3,534,552 3,915,124 4,672,795
Month 7 1,052,715 1,013,628 1,413,821 1,566,049 1,869,118
Month 8 1,263,258 1,267,035 1,767,276 1,957,562 2,336,398
Month 9 1,579,072 1,267,035 1,767,276 1,957,562 2,336,398
Total 3rd Quarter 3,895,044 3,547,697 4,948,373 5,481,173 6,541,913
Month 10 1,263,258 1,393,738 1,944,004 2,153,318 2,570,037
Month 11 1,368,529 1,520,442 2,120,731 2,349,074 2,803,677
Month 12 89,045 1,520,442 2,120,731 2,349,074 2,803,677
Total 4th Quarter 2,720,832 4,434,622 6,185,467 6,851,467 8,177,392
Total for year 9,037,120 12,670,347 17,672,761 19,575,619 23,363,976

2
Kedron Nursing home's
Operating Expenses
Years 1 to 5
Year 1 Year 2 Year 3 Year 4 Year 5

Net Revenues 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000

Sales & Marketing

Drivers
Salaries and Benefits 0 0 0 0 0
Commissions % of Revenue 5% 798,000 912,000 1,220,000 1,395,000 1,830,000
Direct Mail Campaign

All other expenses % of

Revenue 6% 957,600 1,094,400 1,464,000 1,674,000 2,196,000
Total Sales and Marketing 1,755,600 2,006,400 2,684,000 3,069,000 4,026,000
% of Revenue 11.0% 11.0% 11.0% 11.0% 11.0%

Research & Development

Drivers
Salaries and Benefits 0 0 0 0 0
Advetising 50,000 60,000 100,000 250,000 300,000

All other expenses % of

Revenue 3% 478,800 547,200 732,000 837,000 1,098,000
Total Reaserch & Development 528,800 607,200 832,000 1,087,000 1,398,000
% of Revenue 3.3% 3.3% 3.4% 3.9% 3.8%

General & Administration

Drivers
Salaries and Benefits 0 0 0 0 0
Depreciation 6,667 40,000 106,667 183,333 266,667
Rent and Utilities 150,000 200,000 300,000 300,000 450,000

2
 All other expenses % of
Revenue 2% 319,200 364,800 488,000 558,000 732,000

Total General & Administration 475,867 604,800 894,667 1,041,333 1,448,667

% of Revenue 3.0% 3.3% 3.7% 3.7% 4.0%

Total Operating Expenses 2,760,267 3,218,400 4,410,667 5,197,333 6,872,667

% of Revenue 17.3% 17.6% 18.1% 18.6% 18.8%

Allocation of Operating Expenses

between:
Vaiable 2,553,600 2,918,400 3,904,000 4,464,000 5,856,000
Fixed 206,667 300,000 506,667 733,333 1,016,667
Total 2,760,267 3,218,400 4,410,667 5,197,333 6,872,667

2
 Sales &
Marketing by
Months &
Quarters
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 0 100,320 220,533 259,867 343,633
Month 2 0 100,320 220,533 259,867 343,633
Month 3 0 140,448 308,747 363,813 481,087
Total 1st Quarter 0 341,088 456,280 521,730 684,420
Month 4 87,780 120,384 264,640 311,840 412,360
Month 5 140,448 140,448 308,747 363,813 481,087
Month 6 175,560 140,448 308,747 363,813 481,087
Total 2nd Quarter 403,788 401,280 536,800 613,800 805,200
Month 7 175,560 160,512 352,853 415,787 549,813
Month 8 210,672 200,640 441,067 519,733 687,267
Month 9 263,340 200,640 441,067 519,733 687,267
Total 3rd Quarter 649,572 561,792 751,520 859,320 1,127,280
Month 10 210,672 220,704 485,173 571,707 755,993
Month 11 228,228 240,768 529,280 623,680 824,720
Month 12 14,850 240,768 529,280 623,680 824,720
Total 4th Quarter 453,750 702,240 939,400 1,074,150 1,409,100

Total for year 1,507,110 2,006,400 2,684,000 3,069,000 4,026,000

3
 Research &
Development
by Months &
Quarters
($)
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 0 30,360 0 0 0
Month 2 0 30,360 0 0 0
Month 3 0 42,504 0 0 0
Total 1st Quarter 0 103,224 141,440 184,790 237,660
Month 4 26,440 36,432 0 0 0
Month 5 42,304 42,504 0 0 0
Month 6 52,880 42,504 0 0 0
Total 2nd Quarter 121,624 121,440 166,400 217,400 279,600
Month 7 52,880 48,576 0 0 0
Month 8 63,456 60,720 0 0 0
Month 9 79,320 60,720 0 0 0
Total 3rd Quarter 195,656 170,016 232,960 304,360 391,440
Month 10 63,456 66,792 0 0 0
Month 11 68,744 72,864 0 0 0
Month 12 4,473 72,864 0 0 0
Total 4th Quarter 136,673 212,520 291,200 380,450 489,300

Total for year 453,953 607,200 832,000 1,087,000 1,398,000

3
 General &
Administrative
by Months &
Quarters
($)
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 0 30,240 0 0 0
Month 2 0 30,240 0 0 0
Month 3 0 42,336 0 0 0
Total 1st Quarter 0 102,816 152,093 177,027 246,273
Month 4 23,793 36,288 0 0 0
Month 5 38,069 42,336 0 0 0
Month 6 47,587 42,336 0 0 0
Total 2nd Quarter 109,449 120,960 178,933 208,267 289,733
Month 7 47,587 48,384 0 0 0
Month 8 57,104 60,480 0 0 0
Month 9 71,380 60,480 0 0 0
Total 3rd Quarter 176,071 169,344 250,507 291,573 405,627
Month 10 57,104 66,528 0 0 0
Month 11 61,863 72,576 0 0 0
Month 12 4,025 72,576 0 0 0
Total 4th Quarter 122,992 211,680 313,133 364,467 507,033

Total for year 408,512 604,800 894,667 1,041,333 1,448,667

3
Kedron Nursing home's
Personnel
Years 1 to 5
($)
Year 1 Year 2 Year 3 Year 4 Year 5

Net Revenues 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000

Medicals
Sales Manager
Marketing Manager
Customer service
Total Salary
Benefits
Percent (%) 15% 15% 17% 20% 20%
Total benefit costs 0 0 0 0 0
Total S & M Compensation 0 0 0 0 0
% of Revenue 0.0% 0.0% 0.0% 0.0% 0.0%

Research and Development

R & D Manager
Engineers
Technicians
Subcontract
(other…)
(other…)
Total Salary 0 0 0 0 0
Benefits
Percent (%) 15% 15% 17% 20% 20%
Total benefit costs 0 0 0 0 0
Total R & D Compensation 0 0 0 0 0
% of Revenue 0.0% 0.0% 0.0% 0.0% 0.0%

General & Administration

Adminstrative Officer
Adminstrative Aid
Accountant
Secretarial Receptionist
Clerks and purchaser
Total Salary
Benefits
Percent (%) 15% 15% 17% 20% 20%
Total benefit costs 0 0 0 0 0
Total G & A Compensation 0 0 0 0 0
% of Revenue 0.0% 0.0% 0.0% 0.0% 0.0%

Cost of Revenue

3
 Nursing Homes
personnel
Geriatrician 180,000 180,000 180,000 180,000 180,000
Nurses 288,000 288,000 288,000 288,000 288,000
Community Psychologiest 144,000 144,000 144,000 144,000 144,000
Adminstrative Officer 72,000 72,000 72,000 72,000 72,000
Adminstrative Aid 72,000 72,000 72,000 72,000 72,000
Accountant 60,000 60,000 60,000 60,000 60,000
Secretarial Receptionist 42,000 42,000 42,000 42,000 42,000
Clerks and purchaser 42,000 42,000 42,000 42,000 42,000
Care Givers 378,000 378,000 378,000 378,000 378,000

Security Guards 72,000 72,000 72,000 72,000 72,000

Total Salary 1,350,000 1,350,000 1,350,000 1,350,000 1,350,000
Benefits
Percent (%) 15% 15% 20% 20% 25%
Total benefit costs 202,500 202,500 270,000 270,000 337,500
Total Salary Costs 1,552,500 1,552,500 1,620,000 1,620,000 1,687,500
Total wages
Benefits
Percent (%)
Total benefit costs
Total Wage Costs
Total salaries
Benefits
Percent (%) 15% 15% 20% 20% 25%
Total benefit costs 0 0 0 0 0
Total Salary Costs 0 0 0 0 0

Total COR's Compensation 1,552,500 1,552,500 1,620,000 1,620,000 1,687,500

% of Revenue 9.7% 8.5% 6.6% 5.8% 4.6%

Total Salary & Wages 1,350,000 1,350,000 1,350,000 1,350,000 1,350,000

Total Benefits 202,500 202,500 270,000 270,000 337,500
Total Compensation 1,552,500 1,552,500 1,620,000 1,620,000 1,687,500
% of Revenue 9.7% 8.5% 6.6% 5.8% 4.6%

3
 Kedron Nursing home's
Extraordinary Income &
Expense
Years 1 to 5

Year Yea Yea Yea

1 Year 2 r3 r4 r5

Income
(Item…) 0
(Item…)
(Item…)
Total 0 0 0 0 0
Start-up expenses
25,00
Legal 0
20,00
Relocation 0
(Item…)
45,00
Total 0 0 0 0 0
Total Extraordinary (45,0
Income/(Expense) 00) 0 0 0 0

Extraordinary Income and Expense by

Months & Quarters
($)
Year Yea Yea Yea
1 Year 2 r3 r4 r5
(25,0
Month 1 00)
(20,0
Month 2 00)
Month 3
(45,0
Total 1st Quarter 00) 0 0 0 0
Month 4
Month 5
Month 6
Total 2nd Quarter 0 0 0 0 0
Month 7
Month 8
Month 9
Total 3rd Quarter 0 0 0 0 0
Month 10
Month 11
Month 12
Total 4th Quarter 0 0 0 0 0
(45,0
Total for year 00) 0 0 0 0

3
Kedron Nursing home's
Taxes
Years 1 to 5

Year 1 Year 2 Year 3 Year 4 Year 5

15,960,00 18,240,00 24,400,00 27,900,00 36,600,00

Net Revenues 0 0 0 0 0

Income Tax (Rate Federal &

State) 0.40 0.40 0.40 0.40 0.40

Net Earnings Before Taxes 2,321,586 2,045,253 2,010,572 2,821,048 6,067,358

15,265,81
Cumulative 2,321,586 4,366,839 6,377,411 9,198,459 7

Taxes 793,555 696,839 684,700 968,367 2,104,575

Percent of Revenues 5.0% 3.8% 2.8% 3.5% 5.8%

3
 Kedron Nursing home's
Property and Equipment
Years 1 to 5
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Purch
ased
15,960, 24,400 27,900 36,600
Net Revenues Assets 000 18,240,000 ,000 ,000 ,000

Capital Expenditures
Computers, Software & 200,00 250,00 350,00
Office Equipment 20,000 100,000 0 0 0
3,297,3 250,00 300,00 300,00
Plant & Equipment 30.00 350,000 0 0 0
15,750, 100,00 100,00 100,00
Building and Vehechile 000 50,000 0 0 0
Total Capital 19,067, 550,00 650,00 750,00
Expenditures 0 330 500,000 0 0 0
% of Revenue 119.5% 2.7% 2.3% 2.3% 2.0%

Depreciation Computers, Sofware & Office Equipment (allocated to General & Administrative
Expenses)
Depreciation Rate:
Years 1 3 3 3 3 3
Year 0 0 0 0 0 0
Year 1 6,667 6,667 6,667 0 0
Year 2 33,333 33,333 33,333 0
Year 3 66,667 66,667 66,667
Year 4 83,333 83,333
116,66
Year 5 7
106,66 183,33 266,66
Total Depreciation 6,667 40,000 7 3 7

Depreciation on Plant and Equipment (allocated to Cost of Revenue)

Depreciation Rate:
Years 1 7 7 7 7 7
Year 0 0 0 0 0 0
471,04 471,04 471,04
Year 1 471,047 471,047 7 7 7
Year 2 50,000 50,000 50,000 50,000
Year 3 35,714 35,714 35,714
Year 4 42,857 42,857
Year 5 42,857
556,76 599,61 642,47
Total Depreciation 471,047 521,047 1 9 6

Depreciation Other (allocated to

Cost of Revenue)
Depreciation Rate:
Years 1 10 10 10 10 10

3
 Year 0 0 0 0 0 0
1,575,0 1,575, 1,575, 1,575,
Year 1 00 1,575,000 000 000 000
Year 2 5,000 5,000 5,000 5,000
Year 3 10,000 10,000 10,000
Year 4 10,000 10,000
Year 5 10,000
1,575,0 1,590, 1,600, 1,610,
Total Depreciation 00 1,580,000 000 000 000

2,052,7 2,253, 2,382, 2,519,

Total Depreciation 14 2,141,047 428 952 142
% of Revenue 12.9% 11.7% 9.2% 8.5% 6.9%

Property & Equipment

19,067, 20,117 20,767 21,517
Gross Asset Value 0 330 19,567,330 ,330 ,330 ,330
Accumulated 2,052,7 6,447, 8,830, 11,349
Depreciation 14 4,193,761 189 141 ,283
Net Property and 17,014, 13,670 11,937 10,168
Equipment 0 616 15,373,569 ,141 ,189 ,047
% of Revenue 106.6% 84.3% 56.0% 42.8% 27.8%

Capital Expenditures by
Months & Quarters
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1 50,000 100,000
Month 2 100,000 100,000
Month 3 50,000
100,00 200,00 200,00
Total 1st Quarter 200,000 200,000 0 0 0
Month 4 40,000
Month 5
Month 6 100,000
200,00 200,00 200,00
Total 2nd Quarter 40,000 100,000 0 0 0
Month 7 40,000
Month 8
Month 9 100,000
100,00 100,00 200,00
Total 3rd Quarter 40,000 100,000 0 0 0
Month 10
Month 11
Month 12 100,000
150,00 150,00 150,00
Total 4th Quarter 0 100,000 0 0 0
550,00 650,00 750,00
Total for year 280,000 500,000 0 0 0

3
Kedron Nursing home's
Working Capital
Years 1 to 5
($)
Year 1 Year 2 Year 3 Year 4 Year 5
15,960,00 18,240,00 36,600,00
Net Revenues 0 0 24,400,000 27,900,000 0
Accounts Receivable
% of Revenue 8.3% 8.3% 8.3% 8.3% 8.3%
Days Outstanding 30 30 30 30 30
Accounts Receivable 134,460 2,180,045 2,835,280 3,241,980 4,252,920
(Increase)/Decrease from (2,045,58 (1,010,94
Prev. Period (134,460) 5) (655,235) (406,700) 0)

Inventory
% of Revenue 8.3% 8.3% 6.7% 6.7% 6.7%
Inventory Turns 12 12 15 15 15
Inventory Days 30 30 24 24 24
Inventory 134,460 2,180,045 2,288,720 2,617,020 3,433,080
(Increase)/Decrease from (2,045,58
Prev. Period (134,460) 5) (108,675) (328,300) (816,060)

Other Current Assets

% of Revenue 1.0% 1.0% 1.0% 1.0% 1.0%
Days 4 4 4 4 4
Other CA Value 16,200 262,656 341,600 390,600 512,400
(Increase)/Decrease from
Prev. Period (16,200) (246,456) (78,944) (49,000) (121,800)

Accounts Payable & Accrued

Expenses
% of Revenue 8.7% 8.7% 8.7% 8.7% 8.7%
Days 31 31 31 31 31
AP & Accrued Value 226,291 2,285,107 2,971,920 3,398,220 4,457,880
Increase/(Decrease) from
Prev. Period 226,291 2,058,816 686,813 426,300 1,059,660

Other Current Liabilites

% of Revenue 1.0% 1.0% 1.0% 1.0% 1.0%
Days 4 4 4 4 4
Other Current Liabilities 16,200 262,656 341,600 390,600 512,400
Increase/(Decrease) from
Prev. Period 16,200 246,456 78,944 49,000 121,800

3
Revenues by Months &
Quarters
($)
Year 1 Year 2 Year 3 Year 4 Year 5
Month 1
Month 2
Month 3
Total 1st Quarter
Month 4
Month 5
Month 6
Total 2nd Quarter
Month 7
Month 8
Month 9

Total 3rd Quarter

Month 10
Month 11
Month 12

Total 4th Quarter

Total for year

4
 0 912,000 1,220,000 1,395,000 1,830,000
0 912,000 1,220,000 1,395,000 1,830,000
0 1,276,800 1,708,000 1,953,000 2,562,000
0 3,100,800 4,148,000 4,743,000 6,222,000
798,000 1,094,400 1,464,000 1,674,000 2,196,000
1,276,800 1,276,800 1,708,000 1,953,000 2,562,000
1,596,000 1,276,800 1,708,000 1,953,000 2,562,000
3,670,800 3,648,000 4,880,000 5,580,000 7,320,000
1,596,000 1,459,200 1,952,000 2,232,000 2,928,000
1,915,200 1,824,000 2,440,000 2,790,000 3,660,000
2,394,000 1,824,000 2,440,000 2,790,000 3,660,000
10,248,00
5,905,200 5,107,200 6,832,000 7,812,000 0
1,915,200 2,006,400 2,684,000 3,069,000 4,026,000
2,074,800 2,188,800 2,928,000 3,348,000 4,392,000
135,000 2,188,800 2,928,000 3,348,000 4,392,000
12,810,00
4,125,000 6,384,000 8,540,000 9,765,000 0
13,701,00 18,240,00 36,600,00
0 0 24,400,000 27,900,000 0
Accounts Receivable by Months & Quarters
Year 1 Year 2 Year 3 Year 4 Year 5

Month 1 - 908,352
Month 2 - 908,352
Month 3 - 1,271,693 1,377,136 1,574,676 2,065,704

Month 4 794,808 1,090,022

Month 5 1,271,693 1,271,693
Month 6 1,589,616 1,271,693 1,620,160 1,852,560 2,430,240

Month 7 1,589,616 1,453,363

Month 8 1,907,539 1,816,704

Month 9 2,384,424 1,816,704 2,268,224 2,593,584 3,402,336

Month 10 1,907,539 1,998,374

Month 11 2,066,501 2,180,045

Month 12 134,460 2,180,045 2,835,280 3,241,980 4,252,920

4
Inventory by Months &
Quarters
Year 1 Year 2 Year 3 Year 4 Year 5

Month 1 - 908,352
Month 2 - 908,352
Month 3 - 1,271,693 1,111,664 1,271,124 1,667,496

Month 4 794,808 1,090,022

Month 5 1,271,693 1,271,693
Month 6 1,589,616 1,271,693 1,307,840 1,495,440 1,961,760

Month 7 1,589,616 1,453,363

Month 8 1,907,539 1,816,704

Month 9 2,384,424 1,816,704 1,830,976 2,093,616 2,746,464

Month 10 1,907,539 1,998,374

Month 11 2,066,501 2,180,045

Month 12 134,460 2,180,045 2,288,720 2,617,020 3,433,080

Other Current Assets by Months & Quarters

Year 1 Year 2 Year 3 Year 4 Year 5

Month 1 - 109,440
Month 2 - 109,440
Month 3 - 153,216 165,920 189,720 248,880

Month 4 95,760 131,328

Month 5 153,216 153,216
Month 6 191,520 153,216 195,200 223,200 292,800

Month 7 191,520 175,104

Month 8 229,824 218,880

Month 9 287,280 218,880 273,280 312,480 409,920

Month 10 229,824 240,768

Month 11 248,976 262,656

Month 12 16,200 262,656 341,600 390,600 512,400

4
Accounts Payble & Accrued Expenses by Months & Quarters
Year 1 Year 2 Year 3 Year 4 Year 5

Month 1 - 5,940

Month 2 0 0

Month 3 31 31 1,443,504 1,650,564 2,165,256

Month 4 798,000 1,150,579

Month 5 1,3 11,912 1,324,954

Month 6 1,6 52,179 1,332,979 1,698,240 1,941,840 2,547,360

Month 7 1,6 66,224 1,515,379

Month 8 1,9 85,424 1,888,205

Month 9 2,4 78,269 1,904,256 2,377,536 2,718,576 3,566,304

Month 10 2,0 20,536 2,086,656

Month 11 2,1 59,069 2,277,082

Month 12 226,291 2,285,107 2,971,920 3,398,220 4,457,880

Other Current Liabilities by Months &

Quarters
Year 1 Year 2 Year 3 Year 4 Year 5

Month 1 - 109,440

Month 2 - 109,440

Month 3 - 153,216 165,920 189,720 248,880

Month 4 95, 760 131,328

Month 5 153,216 153,216

Month 6 191,520 153,216 195,200 223,200 292,800

Month 7 191,520 175,104

Month 8 229,824 218,880

Month 9 287,280 218,880 273,280 312,480 409,920

Month 10 229,824 240,768

Month 11 248,976 262,656

Month 12 16, 200 262,656 341,600 390,600 512,400

4
Kedron Nursing home's
Funding Projections
Years 1 to 5
Begin Year 1 Year 2 Year 3 Year 4 Year 5
1,500,00
Beginning Cash 0
Equity
12,000,00 15,000,00 16,000,00 18,000,00
Common 5,000,000 0 0 0 0
Increase / (Decrease) Previous
Period 5,000,000 7,000,000 3,000,000 1,000,000 2,000,000
Preferred
1,000,00
A Round 0 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
B Round 500,000 500,000 500,000 500,000
1,000,00
Total Preferred 0 1,000,000 1,500,000 1,500,000 1,500,000 1,500,000
Increase / (Decrease) Previous
Period 0 500,000 0 0 0
1,000,00 13,500,00 16,500,00 17,500,00 19,500,00
Total Equity 0 6,000,000 0 0 0 0

Debt
Short Term Debt
Increase / (Decrease) Previous
Period 0 0 0 0 0

Long Term Debt

Current Portion
Long Term Portion 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000
Total Long Term
Debt 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000

Increase / (Decrease) Previous

Period
Current Portion 0 0 0 0 0
Long Term Protion 1,700,000 0 0 0 0
Total Long Term
Debt 1,700,000 0 0 0 0

1,000,00 15,200,00 18,200,00 19,200,00 21,200,00

Total Equity & Debt 0 7,700,000 0 0 0 0

Interest
Interest Rate
Short Term Debt 16.0% 16.0% 16.0% 16.0% 16.0%
Long Term Debt 18.0% 18.0% 18.0% 18.0% 18.0%

Interest Expense
Short Term Debt 0 0 0 0 0
Long Term Debt 306,000 306,000 306,000 306,000 306,000

4
 Total Interest 306,000 306,000 306,000 306,000 306,000

Interest Income
Interest Rate 4.0% 4.0% 4.0% 4.0% 4.0%
Interest Income 0 0 0 0 10,000

Retained Earnings
Net Income 3,115,141 2,742,091 2,695,272 3,789,415 8,171,933
Dividends 50,000
Increase / (Decrease) Retained
Earnings 3,115,141 2,742,091 2,695,272 3,789,415 8,121,933
Beginning Retained 12,341,92
Earnings 0 3,115,141 5,857,233 8,552,505 0
Ending Retained 12,341,92 20,463,85
Earnings 3,115,141 5,857,233 8,552,505 0 2

4
Kedron Nursing home's
Income Statement
Years 1 to 5
Year 1 Year 2 Year 3 Year 4 Year 5

15,960,00 18,240,00 24,400,00 27,900,00 36,600,00

NET REVENUES 0 0 0 0 0

10,527,14 12,670,34 17,672,76 19,575,61 23,363,97

COST OF REVENUE 7 7 1 9 6
% of Revenues 66.0% 69.5% 72.4% 70.2% 63.8%

13,236,02
GROSS PROFIT 5,432,853 5,569,653 6,727,239 8,324,381 4
% of Revenues 34.0% 30.5% 27.6% 29.8% 36.2%

OPERATING EXPENSES
Sales & Marketing 1,755,600 2,006,400 2,684,000 3,069,000 4,026,000
Research & Development 528,800 607,200 832,000 1,087,000 1,398,000
General and Administration 475,867 604,800 894,667 1,041,333 1,448,667
Total Operating Expenses 2,760,267 3,218,400 4,410,667 5,197,333 6,872,667
% of Revenues 17% 18% 18% 19% 19%

EARNINGS FROM OPERATIONS 2,672,586 2,351,253 2,316,572 3,127,048 6,363,358

EXTRAORDINARY INCOME /
(EXPENSE) (45,000) 0 0 0 0

EARNINGS BEFORE INTEREST &

TAXES 2,627,586 2,351,253 2,316,572 3,127,048 6,363,358

INTEREST INCOME / (EXPENSE) (306,000) (306,000) (306,000) (306,000) (296,000)

NET EARNINGS BEFORE TAXES 2,321,586 2,045,253 2,010,572 2,821,048 6,067,358

TAXES 793,555 696,839 684,700 968,367 2,104,575

NET EARNINGS 3,115,141 2,742,091 2,695,272 3,789,415 8,171,933

% of Revenues 19.5% 15.0% 11.0% 13.6% 22.3%

4
Kedron Nursing home's
Balance Sheet
Years 1 to 5
Begin Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
CURRENT ASSETS
Cash 1,500,000 (5,742,104) 4,108,681 11,430,284 17,643,950 28,767,686
Accounts Receivable 134,460 2,180,045 2,835,280 3,241,980 4,252,920
Inventories 134,460 2,180,045 2,288,720 2,617,020 3,433,080
Other Current Assets 16,200 262,656 341,600 390,600 512,400
Total Current Assets 1,500,000 (5,456,984) 8,731,427 16,895,884 23,893,550 36,966,086
PROPERTY & EQUIPMENT 0 17,014,616 15,373,569 13,670,141 11,937,189 10,168,047
TOTAL ASSETS 1,500,000 11,557,632 24,104,996 30,566,025 35,830,740 47,134,132

LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Short Term Debt 0 0 0 0 0 0
Accounts Payable & Accrued Expen 226,291 2,285,107 2,971,920 3,398,220 4,457,880
Other Current Liab 16,200 262,656 341,600 390,600 512,400
Current portion of long term debt 0 0 0 0 0 0
Total Current Liabilities 0 242,491 2,547,763 3,313,520 3,788,820 4,970,280

LONG TERM DEBT (less current portion) 0 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000

STOCKHOLDERS' EQUITY
Common Stock 0 5,000,000 12,000,000 15,000,000 16,000,000 18,000,000
Preferred Stock 1,000,000 1,000,000 1,500,000 1,500,000 1,500,000 1,500,000
Retained Earnings 3,115,141 5,857,233 8,552,505 12,341,920 20,463,852
Total Equity 1,000,000 9,115,141 19,357,233 25,052,505 29,841,920 39,963,852
TOTAL LIABILITIES & EQUITY 1,000,000 11,057,632 23,604,996 30,066,025 35,330,740 46,634,132

4
Cash Flow Statement
Year 1 Year 2 Year 3 Year 4 Year 5
OPERATING ACTIVITIES
Net Earnings 3,115,141 2,742,091 2,695,272 3,789,415 8,171,933
Depreciation 2,052,714 2,141,047 2,253,428 2,382,952 2,519,142
Working Capital Changes
(Increase)/Decrease Accounts
Receivable (134,460) (2,045,585) (655,235) (406,700) (1,010,940)
(Increase)/Decrease
Inventories (134,460) (2,045,585) (108,675) (328,300) (816,060)
(Increase)/Decrease Other
Current Assets (16,200) (246,456) (78,944) (49,000) (121,800)
Increase/(Decrease) Accts Pay & Accrd
Expenses 226,291 2,058,816 686,813 426,300 1,059,660
Increase/(Decrease) Other
Current Liab 16,200 246,456 78,944 49,000 121,800
Net Cash Provided/(Used) by Operating
Activities 5,125,226 2,850,785 4,871,603 5,863,667 9,923,735

INVESTING ACTIVITIES
Property & Equipment (19,067,330) (500,000) (550,000) (650,000) (750,000)
Other
Net Cash Used in
Investing Activities (19,067,330) (500,000) (550,000) (650,000) (750,000)

FINANCING ACTIVITIES
Increase/(Decrease) Short
Term Debt 0 0 0 0 0
Increase/(Decrease) Curr.
Portion LTD 0 0 0 0 0
Increase/(Decrease) Long
Term Debt 1,700,000 0 0 0 0
Increase/(Decrease) Common
Stock 5,000,000 7,000,000 3,000,000 1,000,000 2,000,000
Increase/(Decrease) Preferred
Stock 0 500,000 0 0 0
Dividends Declared 0 0 0 0 (50,000)
Net Cash Provided /
(Used) by Financing 6,700,000 7,500,000 3,000,000 1,000,000 1,950,000

INCREASE/(DECREASE) IN CASH (7,242,104) 9,850,785 7,321,603 6,213,667 11,123,735

CASH AT BEGINNING OF YEAR 1,500,000 (5,742,104) 4,108,681 11,430,284 17,643,950

CASH AT END OF YEAR 1,500,000 (5,742,104) 4,108,681 11,430,284 17,643,950 28,767,686

$1,514,088.
NPV ($289,021.13) $250,702.33 $654,663.24 $1,008,317.85 72
IRR 142%

4
Kedron Nursing home's
Break-Even Analysis
Years 1 to 5
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000

Cost of Revenue
Variable 6,753,600 8,716,800 13,456,000 15,156,000 18,624,000
Fixed 3,773,547 3,953,547 4,216,761 4,419,619 4,739,976
Total 10,527,147 12,670,347 17,672,761 19,575,619 23,363,976

Operating Expenses
Variable 2,553,600 2,918,400 3,904,000 4,464,000 5,856,000
Fixed 206,667 300,000 506,667 733,333 1,016,667
Total 2,760,267 3,218,400 4,410,667 5,197,333 6,872,667

Total Costs & Expenses

Variable 9,307,200 11,635,200 17,360,000 19,620,000 24,480,000
Fixed 3,980,214 4,253,547 4,723,428 5,152,952 5,756,642
Total 13,287,414 15,888,747 22,083,428 24,772,952 30,236,642

Variable Costs/Revenue Ratio 0.58 0.64 0.71 0.70 0.67

Break-Even Point Revenues 9,548,493 11,746,714 16,370,972 17,363,208 17,383,920

4
Income Statements
Year 1 by Months
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

NET REVENUES 0 0 0 798,000 1,276,800 1,596,000

COST OF REVENUE 0 0 0 526,357 842,172 1,052,715

GROSS PROFIT 0 0 0 271,643 434,628 543,285

OPERATING EXPENSES
Sales & Marketing 0 0 0 87,780 140,448 175,560
Research & Development 0 0 0 26,440 42,304 52,880
General and Administration 0 0 0 23,793 38,069 47,587
Total Operating Expenses 0 0 0 138,013 220,821 276,027

EARNINGS FROM OPERATIONS 0 0 0 133,629 213,807 267,259

EXTRAORDINARY INCOME / (EXPENSE) (25,000) (20,000) 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES (25,000) (20,000) 0 133,629 213,807 267,259

INTEREST INCOME / (EXPENSE) (25,500) (25,500) (25,500) (25,500) (25,500) (25,500)

NET EARNINGS BEFORE TAXES (50,500) (45,500) (25,500) 108,129 188,307 241,759

TAXES 20,200 18,200 10,200 (43,252) (75,323) (96,703)

NET EARNINGS (30,300) (27,300) (15,300) 64,878 112,984 145,055

5
Income Statements
Year 1 by Months
Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

NET REVENUES 1,596,000 1,915,200 2,394,000 1,915,200 2,074,800 135,000

COST OF REVENUE 1,052,715 1,263,258 1,579,072 1,263,258 1,368,529 89,045

GROSS PROFIT 543,285 651,942 814,928 651,942 706,271 45,955

OPERATING EXPENSES
Sales & Marketing 175,560 210,672 263,340 210,672 228,228 14,850
Research & Development 52,880 63,456 79,320 63,456 68,744 4,473
General and Administration 47,587 57,104 71,380 57,104 61,863 4,025
Total Operating Expenses 276,027 331,232 414,040 331,232 358,835 23,348

EARNINGS FROM OPERATIONS 267,259 320,710 400,888 320,710 347,436 22,606

EXTRAORDINARY INCOME / (EXPENSE) 0 0 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES 267,259 320,710 400,888 320,710 347,436 22,606

INTEREST INCOME / (EXPENSE) (25,500) (25,500) (25,500) (25,500) (25,500) (25,500)

NET EARNINGS BEFORE TAXES 241,759 295,210 375,388 295,210 321,936 (2,894)

TAXES (96,703) (118,084) (150,155) (118,084) (128,774) 1,157

NET EARNINGS 145,055 177,126 225,233 177,126 193,162 (1,736)

Kedron Nursing home's

5
Income Statement
Year 2 by Months
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
NET REVENUES 912,000 912,000 1,276,800 1,094,400 1,276,800 1,276,800

COST OF REVENUE 633,517 633,517 886,924 760,221 886,924 886,924

GROSS PROFIT 278,483 278,483 389,876 334,179 389,876 389,876

OPERATING EXPENSES
Sales & Marketing 100,320 100,320 140,448 120,384 140,448 140,448
Research & Development 30,360 30,360 42,504 36,432 42,504 42,504
General and Administration 30,240 30,240 42,336 36,288 42,336 42,336
Total Operating Expenses 160,920 160,920 225,288 193,104 225,288 225,288

EARNINGS FROM OPERATIONS 117,563 117,563 164,588 141,075 164,588 164,588

EXTRAORDINARY INCOME / (EXPENSE) 0 0 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES 117,563 117,563 164,588 141,075 164,588 164,588

INTEREST INCOME / (EXPENSE) (25,500) (25,500) (25,500) (25,500) (25,500) (25,500)

NET EARNINGS BEFORE TAXES 92,063 92,063 139,088 115,575 139,088 139,088

TAXES (36,825) (36,825) (55,635) (46,230) (55,635) (55,635)

NET EARNINGS 55,238 55,238 83,453 69,345 83,453 83,453

5
Kedron Nursing home's
Income Statement Year 2
Year 2 by Months Total Annual
Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 12 Months Projection

NET REVENUES 1,459,200 1,824,000 1,824,000 2,006,400 2,188,800 2,188,800 18,240,000 18,240,000

COST OF REVENUE 1,013,628 1,267,035 1,267,035 1,393,738 1,520,442 1,520,442 12,670,347 12,670,347

GROSS PROFIT 445,572 556,965 556,965 612,662 668,358 668,358 5,569,653 5,569,653
OPERATING EXPENSES
Sales & Marketing 160,512 200,640 200,640 220,704 240,768 240,768 2,006,400 2,006,400
Research & Development 48,576 60,720 60,720 66,792 72,864 72,864 607,200 607,200
General and Administration 48,384 60,480 60,480 66,528 72,576 72,576 604,800 604,800
Total Operating Expenses 257,472 321,840 321,840 354,024 386,208 386,208 3,218,400 3,218,400
EARNINGS FROM OPERATIONS 188,100 235,125 235,125 258,638 282,150 282,150 2,351,253 2,351,253

EXTRAORDINARY INCOME / (EXPENSE) 0 0 0 0 0 0 0 0

EARNINGS BEFORE INTEREST & TAXES 188,100 235,125 235,125 258,638 282,150 282,150 2,351,253 2,351,253

INTEREST INCOME / (EXPENSE) (25,500) (25,500) (25,500) (25,500) (25,500) (25,500) (306,000) (306,000)

NET EARNINGS BEFORE TAXES 162,600 209,625 209,625 233,138 256,650 256,650 2,045,253 2,045,253

TAXES (65,040) (83,850) (83,850) (93,255) (102,660) (102,660) (818,101) 696,839

NET EARNINGS 97,560 125,775 125,775 139,883 153,990 153,990 1,227,152 2,742,091

5
Kedron Nursing home's
Summary
Years 1 to 5

Year 1 Year 2 Year 3 Year 4 Year 5

Summary Financials ($)
Revenue 15,960,000 18,240,000 24,400,000 27,900,000 36,600,000
Gross Profit 5,432,853 5,569,653 6,727,239 8,324,381 13,236,024
EBIT 2,627,586 2,351,253 2,316,572 3,127,048 6,363,358
EBITDA 4,680,300 4,492,300 4,570,000 5,510,000 8,882,500
Net Earnings 3,115,141 2,742,091 2,695,272 3,789,415 8,171,933
Net Cash from Operating Activities 5,125,226 2,850,785 4,871,603 5,863,667 9,923,735
Capital Expenditures 19,067,330 500,000 550,000 650,000 750,000
Interest Income/(Expense) (306,000) (306,000) (306,000) (306,000) (296,000)
Dividends 0 0 0 0 50,000
Cash (5,742,104) 4,108,681 11,430,284 17,643,950 28,767,686
Total Equity 8,115,141 17,857,233 23,552,505 28,341,920 38,463,852
Total Debt 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000

Growth
Revenue Growth Rate - CAGR: 14% 34% 14% 31%
Net Earnings Growth Rate - CAGR: Nil Nil 40.6% 115.7%

Ratios
Current Ratio -22.5 3.4 5.1 6.3 7.4
Debt to Capital (LT Debt + Equity) 0.2 0.1 0.1 0.1 0.0

Profitability
Gross Profit % 34.0% 30.5% 27.6% 29.8% 36.2%
Operating Expenses % 17.3% 17.6% 18.1% 18.6% 18.8%
Net Earnings % 19.5% 15.0% 11.0% 13.6% 22.3%

Returns
Return on Assets 27.0% 11.4% 8.8% 10.6% 17.3%
Return on Equity 34.2% 14.2% 10.8% 12.7% 20.4%
Return on Capital (LT Debt +
Equity) 28.8% 13.0% 10.1% 12.0% 19.6%

5
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