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unaudited balance sheets for the fiscal year ended September 30,
1995. The next column (PwC Valuation Adjustments) shows changes
made by Hahn. The last column shows Hahn’s estimate of the fair
market value of each category after making his changes.
Valuation of Sta-Home Agency, Inc. - Combined
Adjusted Balance Sheet Approach
Valuation Performed as of 9/30/95
Best Case Scenario
Compiled PwC Fair Market Value
FYE Valuation FYE
9/30/95 Adjustments 9/30/95
Cash $1,271,031 -- $1,271,031
Accounts receivable 9,115,026 ($857,786) 8,257,240
Allowance for contractual adjustments (4,205,058) 274,701 (3,930,357)
Allowance for bad debts -- (264,444) (264,444)
Est. third-party payor settlements--Medicare 2,269,063 (295,473) 1,973,590
Allowance for unsuccessful claims -- (543,803) (543,803)
Accounts receivable-–employees 51,518 -- 51,518
Accounts receivable--other 96,820 -- 96,820
Prepaid expenses 656,465 -- 656,465
Total current assets 9,254,865 -- 7,568,060
Property, plant & equipment 2,850,538 -- 2,850,538
Accumulated depreciation (1,456,464) -- (1,456,464)
Total PP&E 1,394,074 -- 1,394,074
Deposits 9,033 -- 9,033
Long-term accounts receivable–-other 78,435 (59,610) 18,825
Total other assets 87,468 -- 27,858
Workforce-in-place -- 2,100,000 2,100,000
Cost-shifting capacity -- 667,467 667,467
Total intangible assets -- -- 2,767,467
--
Total assets 10,736,407 11,757,459
Current portion of long-term debt 369,967 -- 369,967
Accounts payable 750,199 -- 750,199
Accounts payable–-other 165,808 -- 165,808
Accrued payroll 5,009,968 -- 5,009,968
Accrued payroll taxes 1,141,431 -- 1,141,431
Other accrued expenses 4,206,978 -- 4,206,978
Due to Medicare -- 201,000 201,000
Total current liabilities 11,644,351 -- 11,845,351
Notes payable, long-term portion 500,304 -- 500,304
Total liabilities 12,144,655 -- 12,345,655
Liabilities in excess of assets (1,408,248) -- (588,196)
Valuation of Sta-Home Agency, Inc. - Combined APPENDIX C
Adjusted Balance Sheet Approach
Valuation Performed as of 9/30/95
Base Case Scenario
Compiled PwC Fair Market Value
FYE Valuation FYE
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