Revenue Per Employee Business Definition

The revenue per employee ratio is important for determining the efficiency and productivity of the average employee of a company.

Revenue per employee business definition. Revenue per employee is impacted by several factors. Revenue per employee is calculated as total revenue divided by number of employees. Revenue per employee is a measure of how efficiently a particular company is utilizing its employees. Revenue per employee is an efficiency ratio used to determine the revenue generated per individual working at a company.

It equals the company s total revenue divided by the average number of employees for the period. It is a basic measure of the productivity of an economy industry or organization. Revenue per employee calculated as a company s total revenue divided by its current number of employees is an important ratio that roughly measures how much money each employee generates for the. Revenue per employee is a simple metric calculated by dividing annual revenue by the current total number of employees in the article we have used employment figures which also capture owners managers.

Revenue per employee is an essential financial ratio calculated by dividing revenues generated for a specific period by the number of employees in a company. It helps as a measure of average financial productivity for each employee of the company. A ratio that measures company s productivity by dividing cumulative revenues received over the past twelve months by the number of employees.