--- title: "The #1 Financial FAQ from Florida Healthcare License Applicants" description: The most popular question asked when completing the Proof of Financial Ability to Operate --- [![susan-missal-lenner](https://www.ahca.cpa/hs-fs/hubfs/susan-missal-lenner.png?width=500&height=37&name=susan-missal-lenner.png "susan-missal-lenner")](https://www.ahca.cpa) [![smlcpa logo 318-Sep-18-2021-07-21-54-33-PM](https://www.ahca.cpa/hs-fs/hubfs/smlcpa%20logo%20318-Sep-18-2021-07-21-54-33-PM.png?width=200&height=200&name=smlcpa%20logo%20318-Sep-18-2021-07-21-54-33-PM.png "smlcpa logo 318-Sep-18-2021-07-21-54-33-PM")](https://www.ahca.cpa) - [Home](https://www.ahca.cpa) - [About](https://www.ahca.cpa/about) - [Pricing](https://www.ahca.cpa/services-and-pricing) - [Contact](https://www.ahca.cpa/contact-us-so-we-can-help-you-prepare-your-ahca-application) - [Blog](https://www.ahca.cpa/blog) - [Videos](https://www.ahca.cpa/ahca-help-videos-1) - [Reviews](https://www.ahca.cpa/reviews) # Blog - Proof of Financial Ability to Operate # The #1 Financial Question for Florida Healthcare License Applicants Sep 5, 2021 11:39:05 AM by [Sandy Lenner, CPA](https://www.ahca.cpa/blog/author/sandy-lenner-cpa) 0 Comments - - - The most popular question that is asked by applicants seeking a healthcare license in Florida   regarding the Proof of Financial Ability to Operate is: - How much do I need to show to AHCA ? - How much does it take to be approved by AHCA ? - What is the number for AHCA to accept my filing ?  In fact, one applicant told me that his friend was recently approved by AHCA with a $100,000 number and was curious if that amounts was the magic number to get approved by AHCA. Is this silly or not? This reminds me  of a similar question, What is the number  that someone needs to retire? .  There is no simple answer to either of these questions. Hundreds of books have been written on the magic number to retire.  Let me know if you know the answer. My standard response is that there is no magic number that AHCA will accept and approve you. Quite the contrary, the number is a mathematically calculated on [Schedule 1](https://www.screencast.com/t/bC17SZLy) and derived  from  the information in Schedules 6 and 7 of the Proof of Financial Ability to  Operate. This calculation is one of the criteria that helps AHCA determine if you have the Proof of Financial Ability to Operate.  I will attempt to explain how the amount is calculated. Parts of the calculation are easy to explain and other parts are difficult to explain to a non CPA. Over the years, I have learned to simplify what otherwise is complex and I hope this helps. The magic number that everyone refers to is technically known as Total Working Capital, Contingency Funding and Purchase Price and can be seen on Line 18 of Schedule 1 of Proof of Financial Ability to Operate.  The three components of this calculation will be discussed below.  The Working Capital, Contingency Funding and Purchase Price adjustments in [Schedule 1](https://www.screencast.com/t/bC17SZLy) are explained as follows:  **Contingency Funding-**This equals one  month's average operating expenses from the first year  **Working Capital**-This is the largest cumulative amount, which is calculated during each of the 24 months resulting from the change in  working capital  plus changes in long term loans and equipment purchases. This amount can go up or down dependent of the healthcare facilities monthly operations. By way of example,  if your pre-opening costs  are $1,000 and for any one month your patient receivable increases by $1,000 and your account payables decrease  by $1,000, and you buy equipment for $1,000 , then your negative  working capital  is $4,000 which is also referred to as a cumulative cash need on Schedule 7 Line 21 of the Proof of Financial Ability to Operate. For illustrative purposes the example solely reflects the changes for one month  that cause  negative working capital without considering the changes that contribute to positive working capital for 24 months.  **Purchase Price**-This is not applicable for initial applications. It is applicable when the ownership changes, generally resulting from a sale. The instructions also state For Health Care Clinics, Home Health, and Home Medical Equipment Agencies that the  total proof of funding cannot be less than three(3) times the Contingency Funding amount on line 17. In a way, this is a minimum  funding requirement for these three types of healthcare facilities and may be a surprise to the applicant because  the required funding levels is increased to  three times the Contingency Funding.  In summary, the Contingency Funding is straight forward and the Working Capital is complex, because in any month you could have increases and decreases in the working capital components  and changes in other noncurrent assets and liabilities. For illustrative purposes the example just reflects the changes that cause the negative working capital without considering the changes that contribute to positive working capital.   [Nurse Registry](https://www.ahca.cpa/blog/tag/nurse-registry) [Proof of Financial Ability to Operate](https://www.ahca.cpa/blog/tag/proof-of-financial-ability-to-operate) ![Sandy Lenner, CPA](https://app.hubspot.com/settings/avatar/d41d8cd98f00b204e9800998ecf8427e) ### [Sandy Lenner, CPA](https://www.ahca.cpa/blog/author/sandy-lenner-cpa) - - - ### Recent Posts ![feature image](https://www.ahca.cpa/hubfs/AHCA%20Pictures/DME.png) [A Key Step for HME/DME Providers in Florida](https://www.ahca.cpa/blog/a-key-step-for-hme/dme-providers-in-florida) Aug 28, 2025 4:50:57 PM ![feature image](https://www.ahca.cpa/hubfs/general%20clinic%20good%20pic-1.jpeg) [Florida Medicaid Alert for Changes in Ownership](https://www.ahca.cpa/blog/florida-medicaid-alert-for-changes-in-ownership) Sep 20, 2021 9:00:00 AM [5-Tips before You Start a Florida Nurse Registry](https://www.ahca.cpa/blog/5-tips-before-you-start-a-florida-nurse-registry) Sep 5, 2021 11:45:26 AM ### Posts by Tag - [Proof of Financial Ability to Operate (3)](https://www.ahca.cpa/blog/tag/proof-of-financial-ability-to-operate) - [Nurse Registry (2)](https://www.ahca.cpa/blog/tag/nurse-registry) - [CHOW (1)](https://www.ahca.cpa/blog/tag/chow) - [HME (1)](https://www.ahca.cpa/blog/tag/hme) Support lead generation by donating your contact info here Click This Button Contact Us [Click This Button](https://share.hsforms.com/1TbJ7seYnRqa67f1DjLorWA8nzrp) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Sandy Lenner, CPA", "url" : "https://www.ahca.cpa/blog/author/sandy-lenner-cpa" }, "dateModified" : "2023-06-10T20:08:38.696Z", "datePublished" : "2021-09-05T15:39:05.000Z", "headline" : "The #1 Financial FAQ from Florida Healthcare License Applicants", "mainEntityOfPage" : { "@id" : "https://www.ahca.cpa/blog/the-1-financial-faq-from-florida-healthcare-license-applicants", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.ahca.cpa/hubfs/smlcpa%20logo%20318-Sep-18-2021-07-21-54-33-PM.png" }, "name" : "Susan Missal Lenner, PA" } } ```