DG Accounting Professionals LLC — Dental Accounting Group
Practice Acquisition
Analysis Tool
Access our acquisition underwriting tool — model financials against industry benchmarks, estimate purchase price, and project cash flow.
Practice Acquisition Analysis
Underwrite a target dental practice acquisition against industry benchmarks.
© 2026 DG Accounting Professionals LLC — For informational use only.
Target Practice
Optional — used to label charts and comparisonsSeller's Reported Financials
Enter the seller's actual financials from the broker's prospectus
Operating Profit (Calculated)
--
Margin
--
Seller's Overhead Allocation
Expense Targets
Normalize post-acquisition expenses against industry benchmarks
Benchmark Comparison
How Post-Acquisition Expense Targets Are Calculated
Staff Costs & Facility — Fixed Dollar Inputs
Enter a budgeted dollar amount. These fields auto-fill from the seller's reported actuals as a baseline and can be overridden to model post-acquisition staffing or lease changes. The percentage shown is: Budget $ ÷ Projected Revenue.
Clinical & Direct Operating — Variable Dollar Inputs
Enter a target dollar amount, or leave blank to auto-calculate using: Seller CY Expense ÷ Seller Revenue × Projected Revenue. The percentage shown is the derived rate: Budget $ ÷ Projected Revenue. Comparison bars display percentages against industry benchmarks.
Benchmark Comparison Bars
Each row compares the seller's practice vs. the benchmark average for the applicable revenue tier. Difference expressed in percentage points (pp) — use this to identify over- or under-market expense categories.
Operating Profit
Calculated as: Projected Revenue − Total Overhead (Staff + Clinical + Direct Operating + Facility). Reported before associate doctor compensation.
Total Overhead
0%
Operating Profit
0%
Post-Acquisition Overhead Allocation
Other Expenses
Associate doctor compensation & benefits — enter seller actuals and post-acquisition projections side by side. These are deducted from Operating Profit in the Cash Flow section below.
● Seller's CY Actuals
● Post-Acquisition Budget
ⓘ How to enter this
Not retaining the associate? Enter zero — the full seller cost becomes an add-back.
Buying as a current associate? Reduce by your own salary.
Any reduction is automatically added back to Adjusted EBITDA below.
Seller CY Total Other Expenses
--
Post-Acq Total Other Expenses
--
Add-Back Adjustments
● Seller's CY Add-Back Adjustments
Sum of all non-recurring & personal expenses identified in seller's financials
Seller CY EBITDA
--
Add-Backs
--
Adjusted EBITDA
--
↑ Associate Role Reduction (Auto-Calculated)
Seller CY associate cost minus post-acquisition budget — added back to Adjusted EBITDA since the buyer will not incur this expense.
Add-Back Amount
--
ⓘ What Are Add-Backs?
Add-backs are non-recurring, personal, or non-operating expenses added back to a seller's net income to calculate true, normalized EBITDA for valuation purposes.
They represent cash flow that a buyer would not incur — such as owner or family member salaries, personal expenses run through the business (vehicles, vacations), one-time legal fees, and other discretionary items.
Adding these back to the seller's EBITDA reveals the practice's true earnings potential under new ownership.
Enter the seller's Calendar Year Revenue from the broker's prospectus in the Seller's Reported Financials section above to activate the full acquisition comparison and underwriting tools.
Transaction Costs & Financing
Estimate total acquisition cost and model annual debt service based on your financing terms.
● Transaction Cost Components
Enter the broker's asking price or LOI figure — or see the estimated range below. Auto-fills at 2.5× Adjusted EBITDA once financials are entered.
1 month of total overhead (Staff + Clinical + Direct Op + Facility) — excl. debt service & owner compensation. Override to adjust.
ⓘ About These Estimates
EBITDA Multiple Method — Adjusted EBITDA (EBITDA + non-recurring seller add-backs) multiplied by a market range of 2.5×–3.0×. Typical for well-run independent GP practices in Washington State. Higher multiples reflect stronger profitability and patient retention.
Revenue Multiple Method — Net collections multiplied by 70%–90%. A widely used rule of thumb, particularly useful when EBITDA hasn't been normalized. Higher percentages reflect premium locations, specialty mix, or strong growth trends.
The input field is pre-filled at 2.5× Adjusted EBITDA — the most conservative market benchmark — as a starting point for underwriting. Override with the broker's asking price or LOI figure at any time.
⚠ These are preliminary estimates only. Final purchase price is determined by negotiation and a formal practice valuation by a qualified Dental CPA or appraiser after review of actual tax returns and financial statements.
Due diligence, legal, CPA review
Estimated as: Purchase Price × 20% (asset allocation) × 10% (use tax rate). Buyers pay Use Tax on the tangible asset component of the transaction. Asset allocation typically ranges 15%–20% of purchase price; use tax rates are approximately 6.5% state + local rate. Verify your rate ↗ Override to adjust.
Total Estimated Transaction Cost
--
Enter amounts above to calculate
This total is used as the assumed financed amount in the loan calculator below. Adjust inputs to model different down payment or seller-financing scenarios.
Loan Calculator — Estimated Annual Debt Service
Pre-filled with common dental acquisition terms. Override any field to model your specific financing scenario.
Note: Most dental practice acquisitions are structured as 10 yr / 10 yr amort, 12 yr / 12 yr amort, or 15 yr / 15 yr amort with interest rates typically ranging from 5.5% to 6.5%+ depending on lender, borrower profile, and market conditions. Override the fields above to model any scenario.
Monthly Payment
--
Per month
Annual Debt Service
--
Per year
Total Interest Paid
--
Over full term
ⓘ Lender Liquid Asset Requirement
Banks typically require a buyer to demonstrate at least 10% of the purchase price in liquid assets (cash, money market, investment accounts) to qualify for acquisition financing. This is not a down payment — it is a liquidity reserve that remains in the buyer's possession, demonstrating financial stability to the lender.
Estimated Liquid Assets Required
--
Enter a purchase price above to calculate
Based On
--
Purchase price × 10%
Post-Acquisition Budget
Project revenue growth to model your post-acquisition scenario
Revenue Projection
Attrition assumption: 12 patients/month natural loss
Net new patients/month: +18
Revenue uses rolling average: new patients generate partial-year revenue (avg 6.5 months in year 1)
Est. New Revenue
+$0
Projected Revenue
--
Seller Actuals vs. Post-Acquisition Budget Comparison
ⓘ What is EBITDA?
EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) represents the cash earnings available to the owner after paying all practice overhead and associate doctor expenses — but before debt service, income taxes, and depreciation. In a dental acquisition context, EBITDA is the pool of earnings from which the acquiring doctor services acquisition debt and draws owner compensation. If a buyer does not retain the seller's associates, those costs become an add-back, increasing EBITDA and available cash flow.
Estimated Post-Acquisition Cash Flow
Estimated doctor take-home after overhead, other expenses, and annual debt service. Complete the sections above to populate this analysis.
Complete the sections above to see your estimated cash flow.
This section requires: Seller's Reported Financials, Post-Acquisition Budget expenses, Other Expenses (doctor compensation), and Annual Debt Service from the loan calculator.
ⓘ Income Tax Considerations
Income tax liability after acquisition varies significantly based on individual circumstances — including filing status (married filing jointly vs. single), qualified business income deduction (QBID / Section 199A), retirement plan contributions, itemized deductions, investment real estate, entity structure, and more. A pre-tax cash flow figure alone is not sufficient to project take-home pay.
We recommend scheduling a consultation with a Dental CPA to model your specific post-acquisition tax picture before making a final acquisition decision. Contact DG Accounting Professionals ↗
📅 Ready to Take the Next Step?
Schedule a Discovery Call with a Dental Accounting Group Client Advisor
🔒 Your information is kept confidential and never shared. By booking, you agree to be contacted by DG Accounting Professionals LLC. — dentalaccountingpros.com
⚠ Important Disclaimer & Due Diligence Notice
This tool is for informational purposes only and should not be construed as legal, tax, financial, or professional advice. It is not intended to replace a full due diligence review by a qualified professional (Dental CPA). Users should consult with a qualified professional before making financial or business decisions based on this data. Calculations are based solely on user-entered inputs and industry benchmark data — they are estimates, not guarantees of future performance.
A comprehensive acquisition due diligence review should include, at minimum, analysis of the following source documents and records:
– Adjustments report
– Collections & accounts receivable aging reports
Prospective buyers should engage a qualified Dental CPA and legal counsel before making any acquisition decision. © 2026 DG Accounting Professionals LLC. All Rights Reserved.
© 2026 DG Accounting Professionals LLC dba Dental Accounting Group. All Rights Reserved. | dentalaccountingpros.com
Practice Acquisition Analysis
How to Use This Tool
This tool helps you underwrite a dental practice acquisition by analyzing seller financials, modeling your post-acquisition budget, estimating transaction costs, and projecting cash flow. Work through the sections from top to bottom.
Target Practice Name (Optional)
Enter the name of the practice being evaluated. This label appears in the expense comparison charts and scenario cards to make the analysis easier to read and share.
Seller's Reported Financials
Enter the seller's Calendar Year Revenue and actual expense figures from the broker's prospectus or financial statements. Operating Profit is calculated automatically. All figures are before associate or owner compensation — those are entered separately below.
Expense Targets
Review how the seller's expenses compare to Washington State dental benchmarks. Staff and Facility are fixed-dollar inputs; Clinical and Direct Operating auto-calculate as a percentage of projected revenue. Use this section to identify over- or under-market expense categories.
Other Expenses — Associate Doctor Compensation
Enter seller's actual associate compensation and benefits, then enter your post-acquisition budget. If you are not retaining the associate, enter zero — the difference is automatically calculated as an add-back that increases Adjusted EBITDA.
Add-Back Adjustments
Enter the total of non-recurring, personal, or discretionary expenses identified in the seller's financials (owner salaries, vehicles, vacations, one-time legal fees, etc.). These are added to EBITDA to calculate Adjusted EBITDA — the primary valuation metric used by dental practice brokers and lenders.
Transaction Costs & Financing
Review the estimated purchase price range (auto-calculated from Adjusted EBITDA and revenue multiples) and enter the broker's asking price or LOI figure. Working capital and use tax are auto-estimated. The loan calculator models monthly and annual debt service based on your financing terms.
Post-Acquisition Budget & Comparison
Project new patient growth and estimated revenue for Year 1. The Seller Actuals vs. Post-Acquisition Budget comparison shows a side-by-side breakdown of key metrics including EBITDA, Adjusted EBITDA, and operating margin.
Estimated Post-Acquisition Cash Flow
The cash flow waterfall shows pre-tax income after overhead, associate expenses, add-backs, and annual debt service. This is the estimated amount available for owner compensation and taxes — review this alongside the Income Tax Considerations note before making any acquisition decision.
⚠ All calculations are estimates based on user-entered data and industry benchmarks. This tool does not constitute legal, tax, or financial advice. Engage a qualified Dental CPA before making any acquisition decision.