Net income per employee
Net Income per employee (NIPE) is a company's net income divided by the number of employees. In general, the higher the number, the more efficient the company uses its employees, however the numbers are only directly comparable when comparing companies of a very similar nature. There are no rules about what constitutes a good level of income per employee, or a bad level.
Recently there has been a move to measure corporate performance by measuring a company's Net Profit Per Employee in addition to measuring retuns on capital alone. According to Lowell Bryan writing in the McKinsey Quarterly, "To boost the potential for wealth creation, strategically minded executives must embrace a radical idea: changing financial-performance metrics to focus on returns on talent rather than returns on capital alone."
- Investopedia: Operating Performance Ratios: Sales/Revenue Per Employee
- "The new metrics of corporate performance: Profit per employee". McKinsey & Company. Retrieved 2017-04-25.
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