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Audited Financials For Your Assisted Living Facility

By July 23, 2015October 20th, 20237 Comments

Financial statements are the report card on the financial performance of your assisted living facility. Larger facilities and bigger operators are often required to have audited financial statements to satisfy lenders, investors and funding sources. But what about smaller providers? Are audited financial statements necessary?

Audited financials statements aren’t necessary, unless you have a contractual obligation to provide them to someone. But they can be very helpful, especially when you’re thinking about selling your assisted living facility.

If you’re selling an assisted living facility, the potential buyers are interested in the building, the people and the opportunity. But they’re really interested in your numbers (and so is their appraiser and lender). The financial statements inform the buyer about how much they can afford to pay, how much money they can borrow, and how much opportunity may be in it for them.


Can we trust your numbers?

That’s the question most buyers are thinking if they’re not actually asking. And your ability to answer that question with an emphatic “YES” can make your property more valuable. Here’s why.

Audited financial statements lower a buyer’s risk.

When a buyer receives audited financial statements from a seller, they can rely on the accuracy of those financials more than if they come directly from the seller. They also have greater assurance that the financials were prepared using generally accepted accounting principles, so that they can make an apples to apples comparison with other properties.

Buyers use the historic financial statements from a seller to help decide what price to pay. They also use financial statements from prior periods to show their lender that the assisted living facility will be able to support their proposed debt service, or support their plan to return a property to profitability (if it isn’t already).

The seller’s financial statements for an assisted living facility are important to a buyer, and audited financials often make these important documents worth their cost.


  • What a great article! I found this article really insightful I particularly like the section that talks about the facilities of assisted living and it is a lot less then what people think.

  • Anjaline says:

    Hi thanks for the article it’s hard to find all this information.
    If I want to open a small 6 bed rcfe and I have my family members as partners in the business can They stay there in abcense of employee or administrater.

    • Mike says:

      Anjaline – The answer to your question can be found in your regulations for an RCFE. Here is what I found online: for California. Also check with the California Assisted Living Association. My guess is that your partners or family members could stay in the facility while you’re away as long as they meet all the other requirements of someone working at an RCFE – no shortcuts. Mike

  • Gaetano says:

    Hi Mike,
    I recently came across your website and have been enjoying your posts! Thank you! I am curious if you have a post on or can refer me to a good resource to know industry norms for operating percentages on financial statements for assisted living/ memory care? I am involved in the ownership/ management of a memory care facility and would really like to know how we are doing in terms of what others are doing in the same market place. Thanks a million!

    • Mike says:

      Gaetano – You asked a great question and one that is often difficult to answer. There isn’t a lot of information on industry norms and benchmarks, I believe because there is such variety in the types, sizes, and styles of assisted living. It ends up being an apple to oranges comparison sometimes. With that said, one resource that does a great job collecting industry data is the National Investment Center. They have a lot of information on their website and reports available for purchase. In our work at Senior Care Realty, my team compiles operating data from properties we’ve worked with and use that information to help with market valuations of assisted living facilities. We may be producing our own reports about industry norms soon. If you have any specific questions, please reply and let me know – I’ll try to help. Mike

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