Net Revenue Per Full-Time-Equivalent
Profit plan net revenue per full-time-equivalent establishes the target net revenue per staff member. Net revenue per full-time-equivalent is preferred over total revenue per staff since total revenue includes revenue passed through to outside consultants and would not be comparable from firm to firm. Net revenue per FTE is reduced to a common denominator that gives a meaningful basis for comparison of productivity for firms of various sizes. Compute this ratio for total staff and technical staff.
Operating Profit per Full-Time-Equivalent (FTE)
Operating profit per full-time-equivalent establishes the target operating profit per staff. Operating profit per FTE is profit before deductions for discretionary profit distributions and income taxes. Operating profit per FTE before deductions is a more comparable basis since discretionary distributions and taxes vary from firm to firm. Operating profit per FTE is reduced to a common denominator that gives a meaningful basis for comparison of profitability for firms of various sizes. The spreadsheet model computes the ratio for total staff and technical staff. The chart of operating profit per FTE compares the ratio to prior years' and the current year's profit plan target.