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Series : Ratio Analysis (18 th Post)
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This Ratio helps us to understand the Sales
generated by single employee,This is the measure of performance of human
resource of a company ,It also indicates how effectively a company is utilizing
its Human Resource.
Higher the Ratio the higher the revenue per
employee.Note the Revenue per employee will vary from Industry to Industry
according to number of employees.Revenues will be less in Labour Intensive
Companies on the other hand in Hight Tech companies where the labour is less
the revenue is more
For analytical purposes this
figure should be compared with the historical data to see any improvement or
deterioration. It should also be compared with the other similar companies
operating in the same industry. This comparison over time and across industry
will give usefully insights into the productivity of personnel.
Formula: Sales Revenue Per Employee = Revenue
/ Number of Employees (Average)
Next Post on Ratio Analysis: Operating Performance Ratios: Operating
Cycle
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Considering these ratio helps to understand a company's performance from different perspectives. Traders can gain good suggestions on their trading patterns by consulting Financial Advisory Services providers as well.
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