Introduction : Often companies report some ratios and numbers in public and prospective employees and investors get besmirched with them. These numbers often do not tell a true story of the organization. I had been thinking of some numbers which can throw very good information about companies but are not shared . Here are 4 of them : 3 developed and thought originally by me and one is very less known .

1.       Average Revenue per employee :  This is arrived at by dividing the total annual revenue by total no. of employees during that period.  Higher this ration greater is the knowledge content of the company and higher is the quality of work .

a.       ARPE= Total revenue of company in Mn/(Total # of employees). For example see this :

IT Company Name Total Employees Annual Sales(Crores INR 10 million) Revenue in lakhs/employee
TCS 163,700 23,044 14
Infosys 114,822 21,140 18
Wipro 112000 23,117 21
HCL 64557 5,078 8
Tech Mahindra 35267 4,483 13
Patni Computer 14893 1,751 12

Here you can clearly see that Quality of work done by Infy is in general higher than that of TCS and Wipro being the highest Tech M and Patni are comparable and HCL ranks very low. Incidentally , I found this information about google also.http://static.googleusercontent.com/external_content/untrusted_dlcp/www.google.com/en//enterprise/pdf/butler_tech_rev iew.pdf  and  was amazed to find the ARPE of google in Rupee terms is 495.80 lakhs/year. Its easy to see how these labor arbitrage companies measure up in work content. When you have 2 offers and one company has very high ARPE, do give it a higher weightage.

2.     Employee retentivity ratio (ERR): This can be arrived by dividing the last employee number by total number of employees currently employed by organization . Here a value of 1 means all people who have joined have stayed put . A value of less than 0.25 is warning that company is a hire fire or strongly resented by its employees. Typically see Geometric Ltd. Its last sal code is 13500. Its current employee strength is  2500.  The employee retentivity # becomes  2500/13500 =0.1851/ Which means a high employee turnover/

3.       Days sales outstanding (DSO). This means no of days the company takes to realize its payment after goods/ services have been sold. A higher DSO means, the customers of the company has less faith in company’s  output quality. Normally, the companies have upto 30 days DSO( Telecom ) . Slack companies have 60 days( Geometric ) and poor companies have beyond 90 days. A highly hot company like Apple will have -ve DSO because products are sold in advance. A low DSO means high demand for the company’s products/services and the company is likely to grow faster and charge higher premium for product or services.

4.       People expenses as % of total expenses :  Normally this varies between 0.1 to 0.9.  At low values of 0.1 to 0.3 you will find low intellect persons in a company. At 0.4 to 0.7 you will find clerical work . In 0.7 to 0.9 you will find highly creative work towards 0.9 example movies, art and you will find good scientific work between 0.7 to 0.8

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