Labour
Cost to Net Income = (salaries, wages and benefits) /
net income
This
ratio measures the extent to which labour costs number
of employees x average wage and benefit per employee)
affect net income.
This
ratio indicates the extent to which a reduction in
unproductive labour (as a percent of total labour costs)
may increase net income.
The labour costs to net income ratio is included in
the financial statement ratio analysis spreadsheets
highlighted in the left column, which provide
formulas, definitions, calculation, charts and
explanations of each ratio.
The labour costs to net income ratio is listed in our
labour
ratios.
The labor cost to net
income ratio and other ratios are key
to understanding financial statements. Our
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See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios are calculated
and explained in our spreadsheets.
The labor costs to net
income ratio may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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explanations for each ratio.
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