If a bank adds more full-time employees and posts the same net operating income,its employee productivity ratio,as defined in the text,must fall.

Question

Quizplus · Accepted Answer

The employee productivity ratio is calculated by dividing net operating income by the number of full-time employees. If the bank adds more full-time employees while keeping the net operating income the same, the denominator of the ratio (number of full-time employees) increases while the numerator (net operating income) remains unchanged. This would result in a lower productivity ratio, indicating lower efficiency and profitability per employee.

If a Bank Adds More Full-Time Employees and Posts the Same