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little chance of turning a profit. In fact, Hahn’s 1997 article
states that “Analysis of recent VNA [i.e. traditional visiting
nursing agency] transactions indicates that companies with
operating losses have transacted at multiples of revenue similar
to agencies with operating profits.” Id. at 3.
Accordingly, we conclude that the sale price we have decided
more accurately reflects the fair market value of the Sta-Home
tax-exempt entities than does that of Hahn. We note that our
valuation of $18,675,000 indicates that the Sta-Home tax-exempt
entities would sell at a price-to-revenue multiple of .42, lower
than the .68 median applicable to Hahn’s comparable home health
care agencies. Our finding also indicates that the ratio of
price to book value would be 1.75, which again is less than the
1.90 median for the same comparable companies.
In reaching this value, we have also considered, but
rejected, petitioners’ arguments that conditions in Mississippi
require a finding that the assets of the Sta-Home tax-exempt
entities were worth less than the liabilities assumed.
Petitioners argue strenuously that the Sta-Home tax-exempt
entities’ operation in Mississippi, a relatively poor and rural
State, dramatically reduces their fair market value. Petitioners
do not mention, however, that the Federal per-patient Medicare
payment was higher for Mississippi than for any other State. We
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