Download Forms for Sellers | George D. Stollings and Associates, Inc.

1. The amount of the practice sale prices allocated to goodwill effects the amount of tax Sellers pay on their practice sales. For the last 3 years, on "average", what percent of general practices' sale prices are allocated to goodwill? *

57.2% 67.2% 77.2% 87.2%

2. For banks with significant experience in making practice purchase loans, which 2 of the following 5 are likely to be the "least" important factors considered by the banks in deciding how much they will loan for a practice purchase? (Click on 2 choices.) *

Adjusted pre-tax cashflow of the practice The practice's potential for growth Appraised value of the practice Buyer's clinical experience and dental production history. Buyer's liquidity

3. Regarding a practice with very outdated dental equipment, upgrading the equipment before offering the practice for sale is likely to create which 2 of the following 4 results? (Click on 2 choices.) *

Sale price increases more than the equipment cost Sellability of the practice increases Sale price increases less than the equipment cost Sale price increases equal to the new equipment's cost

4. As of today, if your practice is priced correctly and you guide a qualified buyer to the correct type of bank, which of the following provisions are "most likely" to be in the terms of the bank's loan approval? (Click on all that are correct.) *

Loan for 100% of the practice's sale price 5% down payment with 95% of the sale price financed Adjustable rate interest Fixed rate interest 7 year repayment term 10 year repayment term

6. We recently did a study of 270 practices that were valued for sale or sold in the last 3 calendar years. Which two (2) of the following do you think are the results of our study? (Click on 2 choices.) *

The average annual collections of the practices was $926,110 The average annual collections of the practices was $750,226 68% of the practices had annual collections between $600,439 and $880,424 68% of the practices had annual collections between $445,672 and $1,406,549

7. In regard to Letters of Intent to purchase dental practices, which of the following are "usually" true? (Click on all that are correct.) *

After the Letter of Intent is signed, the potential buyer is under no legal obligation to complete the purchase of the practice. Sellers receive a non-refundable earnest money deposit when the Letter of Intent is signed. Binding confidentiality agreements are included. Potentially contentious issues, such as the allocation of the purchase price, should not be addressed in Letters of Intent and should be deferred to be dealt with later when the practice purchase agreements (sale contacts) are developed. Sellers can not present their practices to other possible buyers, or negotiate with other possible buyers, until after the expiration date of the Letter of Intent.

8. If a seller's accounts receivable are to also be sold with the practice, which of the following factors are very important in determining the amount by which the receivables should be discounted from their face values? (Click all that are correct.) *

The percentage of fees that the practice collects at the time of service. The percentages of production (charges) that are written-off (adjustments) annually due to in-network/PPO dental insurance fee schedules. The amount of balances due in each of 4 aging categories.

9. For which of the following reasons do buyers' accountants often resist high price allocations to goodwill and favor higher percentages of the sale prices allocated to dental equipment? (Click one.) *

To increase the amount of the purchase price that the buyer will be able to tax deduct. To allow the buyer to tax deduct a higher percentage of the purchase price more quickly after buying the practice.

10. Among practice buyers who have never owned a practice before, which of the following are the buyers most likely to be? (Click one choice.) *

New graduates just out of dental school. Associates in other practices that have been out of dental school 1 year. Associates in other practices that have been out of dental school 4 years. Associates in other practices that have been out of dental school 8 years.

11. In cases in which a practice buyer will lease the dental office building or condo, as conditions for approval of practice purchase loans, banks often have requirements for the length of the office lease term that the buyer must be able to obtain. Among banks highly active in dental practice purchase loans, which of the following lease term lengths is most likely to be needed to satisfy banks' requirements? (Click one choice.) *

3-year lease 7-year lease 5-year lease with option to renew for an additional an additional 5-years

12. We recently did a study of 270 practices that were valued for sale or sold in the last 3 calendar years. Which two (2) of the following do you think are the results of our study? (Click on 2 choices.) *

On average, the practices' values / sale prices were 65.2% of their annual collections. On average, the practices' values / sale prices were 75.3% of their annual collections. 68% of the practices valued or sold between 59.6% and 91.0% of their annual collections. 68% of the practices valued or sold between 65.2% and 78.1% of their annual collections.

13. Some sellers want to work in the practice after the sale. Some sellers want to leave the practice immediately after the sale. Some buyers will require that the seller works for some period of time after the sale. Some buyers will not want the seller to work in the practice after the sale. Of the following 8 factors, which 5 are usually the "most" important in determining whether a seller can, can't, or must work after the sale? (Click on 5 choices.) *

Number of operatories Number of assistants available Seller's level of annual production, excluding hygiene Procedures the buyer can do, that the seller referred out of the practice Bank's stipulations or requirements in regard to the buyer's purchase loan approval Seller's desire for income after the sale Procedures the seller does, that the buyer can't do Buyer's level of annual production in current or previous associate jobs

14. In practice purchase agreements (sale contracts), relative to treatments provided by the seller during a specified time before the sale, when sellers are required to handle any required remakes that arise for a specified time following the sale, the rationale for that is which of the following? (Click on one choice.) *

To prevent the buyer from having to provide free treatments to patients To reduce the chances that patients bring legal claims against seller Both of the above

15. When the practice sale is to corporate dentistry (DSO), which of the following is most often the case in regard to the seller working in the practice after the sale? (Click on one choice.) *

Not required to work Required to work 1 year Required to work 3 years Required to work 5 years

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