DentiPath Tools
Practice Purchase Affordability Calculator
Test whether an acquisition scenario leaves a cash-flow cushion after operating overhead, debt service, and an owner compensation target.
Enter decimals with a period. Commas can separate thousands.
What this estimates
This screening model estimates a loan payment, operating cash before debt, debt-service coverage, and annual cash left after debt service and the owner compensation target.
Formula or method
Operating cash equals revenue less modelled overhead. Debt service comes from the financed amount, rate, and amortization. The remaining cushion equals operating cash less annual debt service and owner compensation target.
Worked example
A practice producing $1.4 million with 65% overhead has $490,000 before acquisition debt. If annual debt service is $170,000 and the owner target is $220,000, the model leaves a $100,000 cushion before taxes and unmodelled costs.
Inputs explained
- Purchase price, equity contribution, and working capital.
- Illustrative loan rate and amortization.
- Normalized practice revenue and operating overhead.
- Owner compensation target.
Common mistakes
- Using seller revenue without normalization or diligence.
- Leaving out working capital and transaction costs.
- Treating owner compensation as free cash flow.
- Using the result as a valuation or loan approval.
Use the related guide: How to Estimate Whether a Dental Practice Purchase Can Cash Flow.
Compare ownership scenarios in Finance.
Finance keeps the purchase, loan, overhead, and cash-flow assumptions together for scenario modelling.
Questions
Does this tool send my numbers anywhere?
No. The current calculator runs locally in your browser. Values are not transmitted to DentiPath or saved to an account.
Is this professional advice?
No. It is an educational scenario model. Verify important decisions with qualified professionals and the original documents.
Is this a practice valuation?
No. It is a cash-flow screen using your inputs. Valuation, due diligence, tax structure, and lending require professional analysis.
Methodology and sources
How this tool produces its result
Method
Model purchase price, normalized cash flow, working capital, financing, debt service, taxes, capital needs, and transition obligations.
Boundaries to verify
Valuation and affordability require verified due diligence. Asset and share purchase structures differ.
Official sources
- Buying a business and conducting due diligence Business Development Bank of Canada
- How to value a business Business Development Bank of Canada
- Offices of dentists performance Innovation, Science and Economic Development Canada
- Canada Small Business Financing Program FAQ Innovation, Science and Economic Development Canada
- Change of practice ownership and retiring Royal College of Dental Surgeons of Ontario
Privacy guidance
Use deidentified financial totals only. Exclude patient names, chart numbers, birth dates, insurance identifiers, and clinical details.
This calculator is an educational scenario model. It is not a valuation, lending decision, due-diligence review, financial forecast, or legal, tax, accounting, or investment advice.