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This statistic may or may not be applicable to you depending upon how much actual work you do and how much is farmed out to outside vendors, but, it is worth calculating over time to see your company trends.  Use it to compare your performance to competitors in the industry if the information is available.  It will help you notice when productivity is falling. When your annualized sales is falling, did you bring work into the shop versus hiring outside firms to do it?  If so, annualized sales may drop, but, your margins should increase given the fact you eliminated outside markups on that work.  If you sales figure per head is dropping, also look for productivity drops, or product pricing problems, or signs the market is tightening which does not allow price increases.  If this is the case, look for new products to introduce, or cost reductions in other aspects of your production.  It may not be the most appropriate calculation for the first time, but watch what it is over time and understand the problems it may be exposing.

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