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To: Seeker of Truth who wrote (25116)	5/21/2000 5:34:00 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

It seems to me that the direction, over time, in which these numbers move is very important. Possibly so, but given the extremely different businesses they are in, the numbers are very hard to compare just as a slice in time across all these companies. While I use numbers like this as a sanity check in my own fiscal planning, making comparisons to like companies, I'm not sure that I would want to read overmuch into this one figure without a lot of context. A rapidly growing company, for example, tends to be growing bodies ahead or behind the curve of sales growth, thus suppressing or enhancing this ratio. But the important issue is that the body count remain reasonably coupled to the sales growth, not necessarily which is leading. For some companies, the conservative approach of adding bodies behind sales is a fine way to go and insure not getting too cocky, but if one is trying to penetrate new markets, then one may need the bodies whether the sales are quite there yet or not.

To: Seeker of Truth who wrote (25116)	5/22/2000 8:57:00 AM
From: Sunny	Read Replies (1) \| Respond to of 54805

In many cases the companies use revenue or profit per employee as an internal yardstick. This often leads to the practice of converting or maintaining a high number of contract or temporary workers. Contract employees do not figure in the employee head count, thus, skewing these numbers greatly. I have learned that Even GAAP accounting practices are not necessarily "scientific" and can be effected by the techniques and choices related to when to expense or how to classify certain expenditures. However, I still believe the metrics of top line revenue growth and operating and net profit margin offer the best guide for evaluating companies. Sunny