NATIONAL COMMUNITY PHARMACISTS ASSOCIATION
NATIONAL COMMUNITY PHARMACISTS ASSOCIATION
NATIONAL COMMUNITY PHARMACISTS ASSOCIATION
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In general,other operating expenses (overhead) rangedfrom 6.3 percent to 7.0 percent in the various sales categories,with the lowest sales category having the highest oper-ating expenses as a percent of sales. This observation is notsurprising given the effect of fixed expenses. Fixed expensesdo not grow in relation to sales. Instead, they stay the sameas sales increase and over the long-term will stair-step up. Assales grow and costs stay the same, costs as a percentage ofsales decrease. Again we find that as sales grow, companiesmay become less efficient as they step up their costs to supportthe larger pharmacies.Net Operating Income Before TaxThe group of pharmacies with sales between $2.5 million and $3.5 million showed the highest net operating income as a percentage of sales. For pharmacies with sales over $6.5million, profits as a percentage of sales were lower due tohigher payroll expenses and other operating expenses. However,their median net operating dollars were higher. AVERAGE NET OPERATING INCOME PERCENTAGESales Volume Summary21