Friday, September 01, 2006

Business Math

One way to tell how well run a place is, is to divide their revenue by their number of employees. On news that Microsoft had hired a bunch of people I decided to work their numbers, $44.3B a year in revenue divided by 71,553 = $618,121 generated per person (though I'd imagine that most of them don't see nearly that amount). I hopped over to GM to use the numbers from a notoriously poorly run company to compare; $205B / 335,000 = $611,940 - hardly a big difference, except for the fact that M$ had an outrageous net income of $12.6B (a 28% profit margin?!?! Holy Cripe...); while GM had a net loss of $11.2B (which roughly 100% of which can be traced to their ridiculously generous medical plan and ill thought out retirement plan).

More ratios:
Apple - $1,229,729 per employee (!)
Sony - $427,635 per employee (and they made money, Microsoft would be losing money if their employee output was that low).
P&G - $494,202 per employee (lower than I figured it would be, but P&G operates in a lot of low revenue places using inexpensive local labor)

No comments: