The CEO of BizMark Equipment wants to know what return the firm is getting on the money it is spending on its employees.As the director of HR,you know this is considered return on human capital.You will calculate this as
A) Total Compensation and Benefits / FTEs
B) Revenue - Operating Expense -Pay and Benefits = Adjusted Profit / Pay and Benefits
C) Revenue - Operating Expense - Pay and Benefits + Adjusted Profit / FTEs
D) Total Pay and Benefits Expenditures / Operating Expense

Question

Quizplus · Accepted Answer

The correct formula for calculating return on human capital typically involves assessing the profit generated beyond the cost of pay and benefits in relation to those costs. Choice B, "Revenue - Operating Expense - Pay and Benefits = Adjusted Profit / Pay and Benefits," accurately represents this calculation by isolating the adjusted profit (which is the revenue minus operating expenses and pay and benefits) and then dividing it by the pay and benefits to assess the return specifically on the investment in human capital.

The CEO of BizMark Equipment Wants to Know What Return