Net Income is the bottom line profit for your business. It is the return provided to the owners for their investment in their business. It is measured as a ratio to sales. A variation of this metric is Discretionary Proft which adds the owner’s compensation to Net Income.
How does your pharmacy compare?
Median Net Income as reported in the 2013 NCPA Digest is 3% and Median Discretionary Profit is approximately 6.5%. Increasing Net Income adds to Retained Earnings and can provide funding for business growth in good times and some measure of protection during more difficult economic conditions. Discretionary Profit illustrates what ownership receives in return for both their services and their investment in the business.