- Average 2016 revenue growth was 5%, consistent with last year’s forecast for 2016 of 5% but varied widely across market segments.
- Revenue growth in the alternate site sector was 9%. Revenue growth for hospital distributors was 5%. Long-term care distributors report -2% negative sales growth.
- Revenue growth also varied significantly with distributor size. Very large firms, with revenues exceeding $1 billion, report growth of 4% in 2016. Larger firms (i.e. those with $100 to $700 million in revenue) report the highest growth rate of 6%. Smaller firms with less than $100 million in revenue report only 2% growth in sales.
- Asset turnover rose slightly from 3.7 to 4.0 and inventory turnover increased from 8.9 to 10.3 suggesting gains in efficiency.
- Accounts receivable days outstanding decreased from 43 to 40 and accounts payable days outstanding increased from 29 in 2015 to 34 in 2016.
- Labor costs as a percent of gross margin incr eased significantly for hospital distributors, from 48% to 52% and fell for both alternate site and long-term care distributors.
- Marketing costs range from 0.4% to 0.8% of sales. Selling costs decreased for both alternate site and long-term care distributors and increased for hospital distributors.
- Allows managers to compare individual company performance against industry benchmarks
- Enables managers to identify specific performance aspects that can benefit from focused management attention
- Provides outsiders (such as board members, bankers, CPAs, and new members of management) needed insight intthe industry
- Contributes toward the identification and explanation of trends and major changes occurring in the industry