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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 231.83+1.7%Jan 16 9:30 AM EST
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To: Road Walker who wrote (79131)5/2/2002 7:07:28 PM
From: Saturn VRead Replies (1) of 275872
 
Ref < revenue per Employee >

The metric for an economy is the Net Output [ GDP], divided by number of workers. This is a measure of the national productivity.

However to extend that to a company is not proper. The correct metric for coporate productivity was Value Added per employee i.e [ Revenue - Cost of Goods and Services purchased]/ No of employees.

However in this age of multinational manufacturing, even the value added per employee is not meaningful. If manufacturing operations are moved to a low wage country, and some of the cost savings are passed on the consumer, the value added per employee for the company will drop. However if the overseas operation is a separate corporate entity or a sub contractor, the value added per employee for the parent company becomes very high.

Comparing companies based upon Revenue per employee can become a meaningless exercise.
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