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Net income per employee

Net Income per Employee

Net income per employee is a measure of a company’s profitability relative to its workforce, calculated by dividing the company’s net income by the total number of employees. This metric is used to assess how efficiently a company generates profit from its human resources. Higher net income per employee indicates greater efficiency in using its workforce to generate profits.

Example

A company with a net income of $10 million and 500 employees has a net income per employee of $20,000, reflecting its efficiency in generating profit through its workforce.

Key points

• A measure of profitability relative to the number of employees.

• Calculated by dividing net income by the total number of employees.

• Indicates how efficiently a company generates profit from its workforce.

Quick Answers to Curious Questions

What is net income per employee?

It is a measure of profitability relative to the workforce, calculated by dividing net income by the total number of employees.

Why is net income per employee important?

It helps assess a company’s efficiency in generating profits from its human resources.

What does high net income per employee indicate?

It indicates that a company is efficiently using its workforce to generate profit.

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