More interesting to me is expense per employee:
http://zentu.net/snaps/exp.png
(Disclaimer: I studied accounting)
Amazon, Google and Apple also have the most expensive employees; the cost-per-head is almost 900K.
http://zentu.net/snaps/exp.png
(Disclaimer: I studied accounting)
Amazon, Google and Apple also have the most expensive employees; the cost-per-head is almost 900K.
I think indirect expenses per employee would probably be a much better metric. Amazon buys and sells lots of stuff, which pushes up both their revenue per employee and their expenses per employee; similarly, Google pays websites to place adsense adverts and then resells the space via adwords. On the other hand, eBay just puts buyers and sellers together and doesn't act as intermediary, so the value of goods sold via eBay isn't reflected in eBay's revenue or expenses.
It's a basic maxim of economics (and accounting) that equivalent transactions should be treated equivalently; and whether goods pass directly from seller to buyer (as with eBay) or through an intermediary (as with Google or Amazon) therefore shouldn't affect how we compare the companies.
It doesn't seem right to count server costs and bandwidth (for example) as part of how expensive employees are.
ROI is useful in a case where you make an expenditure now, and get back money (or savings) in the future. For example, you automate shipping for $1 million, and save $300,000 a year, for an ROI of 30%.
It doesn't work for employees, except to the extent that you're taking an up-front hit ("We paid for her to get a Master's degree") in exchange for something else ("Now she's more productive").
Now, if we could get some metrics about salaries, this could become even more interesting.
No, not dividing, only subtracting. Accounting 101: Income - Expense = Profit. The article gave us two pieces of the data: Income and Profit. If something is neither income nor profit, it is an expense.
Grinding down the details into something like "profit per employee" tells only half of the story; it's like looking at only one side of a balance sheet and basing conclusions on that.
It says nothing about how expensive the employees are
I wasn't implying that any of the top 3 were actually paying 899K or 871K or 863K per head, but if that is the amount of resource expenditure it requires to make X amount of profit, it certainly does reveal a bit about how companies are managing their resources . . . a metric any investor would be interested in knowing.
Edit: P.S. Here's the data if you would like to play with the sorts: http://www.zentu.net/snaps/expsort.ods
I get what you're trying to show, but calling the employees expensive because there happen to be a lot of expenses is misleading. They are only expensive if the expenses actually related to the employees.