Well, firstly, the profits are after administrative expenses, so you’re counting your bosses twice in this math. Would make more sense to use EBITDA as the baseline. Or, at the least, net revenue
Secondly, the benefits of your code don’t end with the fiscal cycle. They end when the code is retired. If you’re the guy who programmed Notepad, for instance, that’s been paying dividends for nearly forty years.
It’s not perfect, it’s napkin math
You’ve got to be careful as napkin math can get incredibly deceptive. You can quickly find yourself a victim of Hollywood Accounting with employers/contractors who insist they’ve never turned a profit, despite enjoying a lifestyle that would suggest otherwise.
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How did you calculate that?
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Well, firstly, the profits are after administrative expenses, so you’re counting your bosses twice in this math. Would make more sense to use EBITDA as the baseline. Or, at the least, net revenue
Secondly, the benefits of your code don’t end with the fiscal cycle. They end when the code is retired. If you’re the guy who programmed Notepad, for instance, that’s been paying dividends for nearly forty years.
You’ve got to be careful as napkin math can get incredibly deceptive. You can quickly find yourself a victim of Hollywood Accounting with employers/contractors who insist they’ve never turned a profit, despite enjoying a lifestyle that would suggest otherwise.
Shouldn’t it be revenue minus operational costs divided by the number of employees?
IT support here, my employer makes about 2-3x what I do for an hour of my time. So at best it’s a 50/50 split.
Fact is, many companies have been going towards the image that op posted. Many may not be there yet, but, they’re all trying to get there.
We pay profits three times: on wages, on prices/rents and in taxes, since much of that goes to the private sector, such as the defense industry.