What Does Revenue Per Employee Tell You

Revenue of 1 1 million per employee.

What does revenue per employee tell you. It equals the company s total revenue divided by the average number of employees for the period. This translates to the fact that every employee at this company brought an approximate 160 256 as a revenue for the year 2005. Therefore every employee at company xyz contributed approximately 160 256 in revenue for 2005. In general the top tech company s revenue per employee is more than the manufacturing companies revenue per employee.

But revenue per employee should be a staple statistic on any dashboard. Companies use the formula total revenue total number of employees to determine the revenue per employee. If a problem is identified on the quantitative side then qualitative analysis is necessary. Revenue per employee is an efficiency ratio used to determine the revenue generated per individual working at a company.

Revenue per employee is a measure of how efficiently a particular company is utilizing its employees. There is growing support for revenue per employee as one of the most underrated metrics available for assessing business performance in a crowded marketplace. Revenue per employee is an important ratio that roughly measures how much money each employee generates for the company. Why does revenue per employee matter.

We note that ferrari has the highest sales per employee with approx. To calculate a company s revenue per employee divide the company s total. Fiat on the other hand makes around 538 122 per employee. You don t work to target you work to exceed all reasonable expectations.

Revenue per employee is the calculation used to determine how productive employees are in a business. We must divide the total revenue by the number of employees. The result is 160 256 41. Net revenue for a given period divided by average number of full time employees for that.

Example 4 banking industry. As such we have 50 000 000 312. This formula indicates how productive each employee is in generating revenues for the company. Why is the revenue per employee ratio so important.

By ashley fleming ecardshack. Revenue per employee also called sales per employee is a financial ratio that measures the revenue generated by each employee of the company on average. If you are building something new by defi. It s as straightforward a calculation as you could hope for.

The revenue per employee ratio is important for determining the efficiency and productivity of the average employee of a company. Are you selling the company or building a company.