Market Based Valuation Model For Physiotherapy Practices

Physiotherapy practices are valued in a variety of ways, depending on which party is doing the valuation. There is, however, no clear industry standard of valuation. This research aimed at creating some guidelines regarding what could be considered a fair market value for South African Physiotherapy practices, by creating a predictive model based on financial statements and other relevant practice information. Survey questions related to a set of general data as well as financial statements for three Physiotherapy practices and the subsequent valuation of these practices by the participants. The practices represented small, medium and large Physiotherapy practice in relation to staffing and turnover. A market based multiplier of EBITDA, that is suitable for the South African Market was established using the valuation data obtained from the questionnaires. Further statistical analysis was done using linear regression to create a prediction model for the financial market value of a Physiotherapy practice based on the results of the questionnaire.