Revenue Per Head Formula

This is one of the important measures of performance of employees of the company.

Revenue per head formula. This metric is useful because it states revenue based on both time hour and capacity seats. Formula for calculating revenue per available room revpar revenue per available room revpar is one of the most important statistics in the hotel industry revpar divides the total revenue generated by the hotel by the number of available rooms to sell available rooms total rooms in the hotel out of order rooms. Sometimes the metric can be further broken down by customer segment or product type such as the arpc for enterprise level. The company has achieved total revenue of 250 000 during the year ended on december 31 2018.

Now lets take a look at average revenue per customer arpc which is a pretty self explanatory metric. Formula text revenue per employee frac text net revenue text average number of employees example. For a product based business the formula is revenue number of units sold x average price. It measures in effect the revenue generation capability of the hotel.

Revenue per employee calculates the number of sales generated by one employee or sales done by each employee. Revenue per employee ratio formula. As the name suggests arpc is the average revenue generated from each customer per month or per year. It helps as a measure of average financial productivity for each employee of the company.

A sample sales revenue calculation. For example imagine a company has a yearly revenue of 5 million and has an average of 100 employees for that year. As per its income statement the information is available for the period. For service based companies the formula is revenue number of customers x average price of services.

Revenue per employee is an important ratio that roughly measures how much money each employee generates for the company. To perform the revenue per employee calculation divide the revenue 5 000 000 by the number of employees 100. By tracking the revpash by daypart or even within dayparts the restaurant manager has a useful tool by which to measure performance and to guide his or. The big four accounting firms are few of the world s largest professional services firms and their revenue depends exclusively on their human capital.

It is an easy indicator of productivity efficiency of an organization s personnel. It s a relatively new formula created by cornell university in 1998 and as explained. Revenue per employee formula 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. To calculate a company s revenue per employee divide the company s total.

Why the sales. Sales revenue 1 000 x 350 350 000. In this case you would find the revenue per employee formula gives you a ratio of 50 000 per employee.