• Definition: Labour productivity is basically a "scorecard" of how efficient a worker is. It tells you the value of goods or services a worker creates within a certain time frame, usually every hour.

• Why it matters?: With this, businesses can:

  • Spot the superstar employees 🌟
  • Identify if someone is having a bad day (or maybe a bad month? 🤔)

• Real-World Example: Imagine a warehouse where workers are packing boxes 📦:

  • Average worker: Packs 15 boxes every hour
  • But Tom only packs 12 boxes every hour 😓
  • Result? Tom might need a pep talk or some training! 🗣️
• Formula Time!

Labour Productivity = \(\frac{Total\, Output\, (like \,boxes \,packed)}{Total \,Hours \,Worked} \)

Bigger Picture: You can use this formula for

• Just one worker
• A team 🤝
• Everyone in a company
• Heck, even an entire country when economists feel fancy! 🌍

• Definition: Think of capital productivity as a measure of how good a business is at using its money (capital) to make more money. And by capital, we mainly mean working capital.
• So, What's Working Capital?
  • It’s the difference between a company's current assets (like cash or stocks) and its current liabilities (like debt or owed expenses).
  • In simple words, it's the money the business has on hand to pay for day-to-day stuff.
• Formul Alert!Working Capital=Current Assets−Current LiabilitiesWorking Capital=Current Assets−Current Liabilities And, for capital productivity.

Working Capital Productivity =\(\frac{Sales\ Revenue}{Working\ Capital }\)

• But Context is Key! 🗝️
  • These numbers mean nothing without some context.
  • Always look at industry standards, competitors, and trends to make sense of your results.
• Real-World Example: Let’s say Company A makes $100,000 in sales with a working capital of $20,000. Their working capital productivity would be 5. This sounds great, but if their competitor, Company B, has a productivity of 8, then Company A might need to up their game!