The accounting firm of Deloitte & Touche is the largest international accounting firm in the world as ranked by total revenues. For two recent years, Deloitte & Touche reported the following for its U.S. operations

The accounting firm of Deloitte & Touche is the largest international accounting firm in the world as ranked by total revenues. For two recent years, Deloitte & Touche reported the following for its U.S. operations:








Current
Year
Previous
Year
Revenue (in billions) $10.9 $10.7
Number of professional staff (including partners) 36,571 33,605


a. For the current and previous years, determine the revenue per professional staff.
b. Interpret the trend between the two years.


Answer:









$10,900,000,000
a. Revenue per professional staff, current yr.: 36,571 = $298,050
$10,700,000,000
Revenue per professional staff, previous yr.: = $318,405
33,605




b. The revenues increased between the two years from $10.7 billion to $10.9 billion, or 1.9% [($10.9 – $10.7) ÷ $10.7]. Revenues have increased slowly during this period. The number of employees has grown, from 33,605 to 36,571, or 8.8% [(36,571 – 33,605) ÷ 33,605]. As a result, the revenue per
professional staff employee has declined by approximately $20,000, from $318,405 to $298,050. There is a decline in efficiency during this time. It is interesting that Deloitte expanded staff during this period, even while revenues increased slowly. There is some risk, because there is a nearterm loss of efficiency from this strategy.