How Can KPIs be a Predictor of Cash Flow?
Do you know which key performance indicators (KPI) are the best predictors of cash flows? In this video, Ollin Sykes of Sykes & Company, P.A. explains how a pharmacy’s biggest KPI is the current ratio which should be in 2.5 to 3.5 range. Cash will ebb and flow so net income is not a predictor pharmacy owners want to use. He also discusses how a pharmacy owner needs to keep an eye on operations, fixed asset purchases and debt repayment. It’s important to look at your pharmacy KPIs once a month to observe any trends so you can make adjustments quickly.