Outside of the standard days cash on hand liquidity metric, what other cash or payment term metrics are useful? Currently, we’re considering days in accounts receivable (A/R) (A/R/supply expense/365 days) and average payment period (current liabilities/(total expenses–depreciation)/365), the latter of which Moody’s provides some standard median metrics.
Answer: It’s a good idea not to have too many key performance indicators on a single topic or you court paralysis by analysis. Thus, I think the three you suggest are adequate.
This question was answered by: David Hammer, FHFMA, CHFP, principal at Healthcare Performance Management Consultants.
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