Financial Statements & Ratios
Empl oyee Product i v i ty Rat i os
Employees are the lifeblood of the organization. Without a properly motivated and compensated workforce, few stores can produce much more than basic levels of performance. Employee payroll costs make up the single largest expense category on the income statement. In controlling employee payroll, the key to success is not the absolute level of compensation, but rather the productivity of employees. The two key employee productivity ratios presented in this report are sales per employee and the personnel productivity ratio. Both ratios are measures of employee output. Sales Per FTE Employee = Net Sales ÷ Total Full-Time Equivalent Employees This is simply the level of sales generated per full-time equivalent (FTE) employee. In calculating the ratio, two part-time employees are considered the equivalent of one full-time employee. The ratio provides a means to estimate how many additional employees will be required as the store expands its sales base. Personnel Productivity Ratio = Payroll Expense ÷ Gross Margin x 100 The personnel productivity ratio expresses payroll expense (salaries, wages, payroll taxes and benefits) as a percentage of gross margin. The ratio measures the portion of each gross margin dollar that must be committed to payroll. This is one of the few productivity ratios where a lower figure is desirable.
Conven-
Contractor
ience
Core
Super
Home Center
Oriented
Hardware
Hardware
Hardware
Supply
Employee Productivity
Number Of Full-Time Employees Number Of Part-Time Employees
4 3
6 6
12 10
15
17
5
4
Sales $ Per FTE Employee
218,818 88,561
237,778 96,038
239,693 103,151
304,906 96,826
379,870 117,256
Gross Profit $ Per FTE Employee
Payroll $ Per FTE Employee Payroll Expense (% Of Sales) Personnel Productivity Ratio (%)
40,019
37,933
40,960
43,266
53,511
19.4 47.1
17.9 43.4
16.4 40.7
16.8 50.3
14.6 49.8
Wage $ Per Hour
19.20
18.20
19.70
20.80
25.70
Sales $ Per Payroll Dollar Sales $ Per Payroll Hour
5.40
5.80
5.90
6.40
6.50
105.20
114.30
115.20
146.60
182.60
Number Of Stores
Employees Per 1000 Sq. Ft.
Sales $ Per Sq. Ft.
Gross Profit $ Per Sq. Ft.
Profit Before Taxes $ Per Sq. Ft.
Employees Per 1000 Square Feet
Convenience Hardware Under 1.3
30 15 21
0.9 1.5 2.9
226.10 363.20 558.30
89.80
20.20 23.40 52.60
1.3 To 2.0 Over 2.0
137.70 257.90
Core Hardware Under 1.3
93 61 30
0.9 1.6 2.5
231.00 362.90 509.50
92.70
25.10 41.90 50.60
1.3 To 2.0 Over 2.0
153.80 203.50
Super Hardware Under 1.3
76 24
1.0 1.5 2.8
247.60 351.50 600.20
106.50 146.50 256.40
26.90 38.10 68.90
1.3 To 2.0 Over 2.0
7
14
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