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It looks like you're dividing revenue by employee count No, not dividing, only subtracting. Accounting 101: Income - Expense = Profit. The article gave us t

It looks like you're dividing revenue by employee count No, not dividing, only subtracting. Accounting 101: Income - Expense = Profit. The article gave us two pieces of the data: Income and Profit. If something is neither income nor profit, it is an expense. Grinding down the details into something like "profit per employee" tells only half of the story; it's like looking at only one side of a balance sheet and basing conclusions on that. It says nothing about how expensive the employees are I wasn't implying that any of the top 3 were actually paying 899K or 871K or 863K per head, but if that is the amount of resource expenditure it requires to make X amount of profit, it certainly does reveal a bit about how companies are managing their resources . . . a metric any investor would be interested in knowing. Edit: P.S. Here's the data if you would like to play with the sorts: http://www.zentu.net/snaps/expsort.ods http://www.zentu.net/snaps/expsort.ods

dmv 17y ago
I think this accounting discussion at the per-employee metric is getting out of hand. We're facing a very real apples-and-oranges conversation on expense when comparing Oracle (software) versus Amazon (retail). The margin -- and revenue -- focuses are completely different. If Amazon sustains growth with a 15% profit margin, that's cause for celebration; if Oracle's margin dropped to 15%, heads would roll.
jonknee 17y ago
Again, it goes back to efficiencies. Google has few employees for the amount of revenue it generates (high revenue per employee) but also has fairly high costs (millions of servers). They could be paying all of these people minimum wage and your formula would still show high expense per employee. I get what you're trying to show, but calling the employees expensive because there happen to be a lot of expenses is misleading. They are only expensive if the expenses actually related to the employees.
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dmv 17y ago

I think this accounting discussion at the per-employee metric is getting out of hand. We're facing a very real apples-and-oranges conversation on expense when comparing Oracle (software) versus Amazon (retail). The margin -- and revenue -- focuses are completely different. If Amazon sustains growth with a 15% profit margin, that's cause for celebration; if Oracle's margin dropped to 15%, heads would roll.

jonknee 17y ago

Again, it goes back to efficiencies. Google has few employees for the amount of revenue it generates (high revenue per employee) but also has fairly high costs (millions of servers). They could be paying all of these people minimum wage and your formula would still show high expense per employee. I get what you're trying to show, but calling the employees expensive because there happen to be a lot of expenses is misleading. They are only expensive if the expenses actually related to the employees.

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