Revenue Factor
Revenue Factor = Net Multiplier x Utilization = NSR / Total Labor Cost
• A hybrid metric • Recognizes that – for a given number of staff people – there are two ways to increase profitability all other things being equal • Have everyone work more billable hours (increase utilization) • Charge more for each hour (increase net multiplier)
Fast Growth Firm Median
Very High Profit Firm Median
2017 2018 2019 2020 2021
Survey Median
1.80 1.77 2.03
1.83 1.84 1.86 1.90 1.80
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THE PRINCIPALS ACADEMY 2022
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