Financial Statement Analysis
 Ratio Analysis of Financial Statements (Formula, Types, Excel)
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Revenue Per Employee Ratio Formula (Table of Contents)
Revenue Per Employee Ratio Formula
Revenue per employee is an important financial ratio calculated by dividing revenues generated for a specific period by the number of employees in a company. It helps as a measure of average financial productivity for each employee of the company.
Revenue Per Employee Formula
Revenue Per Employee Formula Examples
Here, we would consider four firms from the same industry for calculating this ratio and see how they compare against each other.
Name of Company  Revenues for FY 2017 (in Million US$)  Number of Employees  Sales Per Employee Ratio 
Company ABC  25,000  80,000  312,500 
Company XYZ  46,000  90,000  511,111 
Company EFG  23,000  105,000  219,048 
Company UVW  39,000  75,000  520,000 
Compared on the basis of sales per employee ratio, Company UVW comes out on top followed by Company XYZ, Company ABC, and Company EFG in the descending order of ratio values. This broadly indicates which company was best able to utilize its employees in terms of productive assets during a specific financial year.
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Revenue Per Employee Formula – Tech Industry
Below table provides you with the details of sales per employee of top Tech companies.
S. No  Name  Sales Per Employee (Annual) 
1  1,928,831  
2  Points International  1,637,766 
3  Alphabet  1,457,056 
4  VeriSign  1,199,892 
5  Criteo  881,309 
6  InterXion Holding  824,043 
7  Blucora  730,627 
8  AutoWeb  690,238 
9  681,914  
10  Shutterstock  665,747 
 We note that Facebook has the highest sales per employee.
 All of this list above makes more than half a million sales per employee.
 Interesting to note that Twitter is on the list with $681,914 per employee.
Sales Per Employee – Auto manufacture Industry
Below is the list of top manufacturing companies with their Sales per employees.
S. No  Name  Sales Per Employee (Annual) 
1  Ferrari  1,100,416 
2  Ford Motor  778,045 
3  General Motors  718,953 
4  Tesla  661,273 
5  Toyota Motor  638,522 
6  Honda Motor Co  615,978 
7  Fiat Chrysler Automobiles  538,122 
8  Blue Bird  486,424 
9  Tata Motors  406,627 
10  Kandi Technologies Group  245,715 
 We note that Ferrari has the highest sales per employee with approx. revenue of $1.1 million per employee.
 Fiat on the other hand, makes around $538,122 per employee.
 In general, top tech companies revenue per employee is more than manufacturing companies revenue per employee.
Revenue Per Employee Formula – Banking Industry
Below is the list of top banks with their revenue per employee Formula.
S. No  Name  Sales Per Employee (Annual) 
1  East West Bancorp  502,428 
2  UBS Group  498,720 
3  Westpac Banking  493,447 
4  Credit Suisse Group  432,640 
5  Bank of America  417,952 
6  JPMorgan Chase  403,485 
7  Bank of N.T Butterfield  401,880 
8  Royal Bank of Canada  388,697 
9  ING Groep  386,020 
10  Bank of Montreal  377,244 
 Overall, banks also make far less sales per employee as compared to the tech industry
 JPMorgan makes an Annual revenue of $403,485 per employee.
Explanation of Sales Per Employee Ratio Formula
source: Ycharts.com
This ratio helps determine how productively a company is able to utilize its employees and contribute to its business growth. If a company has higher revenue per employee formula, it means that the company is generally doing well and trying to make optimum utilization of available manpower in form of its employees. However, laborintensive companies typically tend to have lower ratios as compared to those which require a lesser amount of labor. This is why generally this ratio is employed to compare the performance of companies within an industry.
When we compare to this per employee of Facebook, Google, and Amazon, we note that Facebook has the highest annual this employee at $1.929 million per employee! Google has this employee of $1.457 million and Amazon has a revenue of $392,034 per employee
Use and Relevance of Revenue Per Employee Formula
Other Similar Ratios:
There are other similar ratios which are calculated by dividing net income instead of revenues from the number of employees to try and see how a company fares in terms of employeebased productivity. Revenues are an easily understood term and often used in financial ratio calculations, which helps explain its relevance in calculating this ratio.
Role of Employee Turnover Rate:
It must also be remembered that the employee turnover rate impacts this financial ratio as well. Employee turnover rate is the percentage of the total workforce which voluntarily leaves a company during a year and needs to be replaced. This should not be confused with employee attrition which refers to employees who have either retired or were terminated by the company.
Relevance of Sales Per Employee
Keeping in mind all these factors, only the average number of employees is usually utilized for calculating sales per employee ratio formula. Employee represents a unique asset to a business and if the concept of asset utilization is applied carefully in nurturing employees with a high level of productivity, a company can potentially perform much better than its peers. Such companies tend to have relatively better sales per employee ratios within their specific industry.
How to Use Revenue Per Employee Formula?
The ratio by itself is of little use without any frame of reference, hence it should be read against the historical ratios for same company over a number of years to be able to see if the ratios are rising or falling. This would help indicate improving or declining level of employee productivity. Then again, the ratios should be compared with industry peers and how they have performed over the years.
Revenue Per Employee Formula Calculator
You can use the following Revenu per Employee Ratio Ratio Calculator.
Revenue  
Current Number of Employees  
Revenue per Employee Formula=  
Revenue per Employee Formula= 


Revenue Per Employee Formula in Excel (with excel template)
Let us now do the same example above in Excel. This is very simple. You need to provide the two inputs of Revenue and Number of Employees.
You can easily calculate the Revenue per employee ratio formula in the template provided.
You can download this revenue per employee ratio template here – Revenue per Employee Excel Template
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This has been a guide to Revenue per employee ratio, its uses along with practical examples. Here we also provide you with Sales per employee Calculator with downloadable excel template.
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