Short summary F&E HRM
Lecture 1
Historical costs = values in prior financial statements, annual reports,
industry reports or company surveys.
Examples:
- Revenue per employee.
- Expenses per employee.
- Training expenses per employee.
Standard or average values = available fors ome output and quality
measures.
Examples:
- Employee turnover.
- Absenteeism
- Cost per hire
Beware: context matters!
Participants’ wages are often used to express time/productivity.
To evaluate HR decisions
Benefit-Cost Ratio (BCR)
= (benefits/costs) x 100%
- Oldest way to calculate return on investment.
- Used as post-investment measure.
- Expressed in % on annual basis.
Return On Investment (ROI)
= (benefits – costs)/costs x 100%
- Most basic way to evaluate effectiveness of HR initiatives.
- Used for future benefits.
- Expressed in % that indicates initiative attractiveness (> 10% is
optimal).
Payback Period (PP)
= (costs/benefits) x 12 months
- Reverse of BCR.
- Expressed in number of months/years.
Lecture 2
Liquidity = short-term.
Solvency = longer-term.
(Solvabiliteit: geeft aan in welke mate in staat is om op lange termijn
aan financiële verplichtingen te voldoen.)
Income statement
, 1. Expenses
- Cost of Goods and/or Services (CO(G)S) = costs directly
involved in producing a product/delivering a service.
E.g., transport, raw materials.
- Operating expenses or SG&A expenses = costs that are not
directly related to making the product/delivering a service.
E.g., advertising, rent, wages.
2. Revenues
- Gross income or gross profit = brutowinst.
Revenu – CO(G)S
- EBIT = winst voor rente en belastingen.
Revenu – CO(G)S – operating expenses
Revenu – CO(G)S – SG&A
- EBITDA = winst voor rente, belastingen, afschrijvingen en
amortisatie.
EBIT + Depreciation & Amortization costs
Depreciation = tangible assets.
Amortization = intangible assets.
Depreciation/Amortization costs = (asset cost – salvage value)/life
span
Balance sheet
Assets = anything company owns with monetary value.
- Fixed = longer time: HQ, patent.
- Current = quick turnaround: goods, cash.
Liabilities = obligation that sacrifices future economic benefits:
mortgage (hypotheek), loans, payables.
- Equity = capital from others (stakeholders, founder).
Balance sheet terms
Lecture 1
Historical costs = values in prior financial statements, annual reports,
industry reports or company surveys.
Examples:
- Revenue per employee.
- Expenses per employee.
- Training expenses per employee.
Standard or average values = available fors ome output and quality
measures.
Examples:
- Employee turnover.
- Absenteeism
- Cost per hire
Beware: context matters!
Participants’ wages are often used to express time/productivity.
To evaluate HR decisions
Benefit-Cost Ratio (BCR)
= (benefits/costs) x 100%
- Oldest way to calculate return on investment.
- Used as post-investment measure.
- Expressed in % on annual basis.
Return On Investment (ROI)
= (benefits – costs)/costs x 100%
- Most basic way to evaluate effectiveness of HR initiatives.
- Used for future benefits.
- Expressed in % that indicates initiative attractiveness (> 10% is
optimal).
Payback Period (PP)
= (costs/benefits) x 12 months
- Reverse of BCR.
- Expressed in number of months/years.
Lecture 2
Liquidity = short-term.
Solvency = longer-term.
(Solvabiliteit: geeft aan in welke mate in staat is om op lange termijn
aan financiële verplichtingen te voldoen.)
Income statement
, 1. Expenses
- Cost of Goods and/or Services (CO(G)S) = costs directly
involved in producing a product/delivering a service.
E.g., transport, raw materials.
- Operating expenses or SG&A expenses = costs that are not
directly related to making the product/delivering a service.
E.g., advertising, rent, wages.
2. Revenues
- Gross income or gross profit = brutowinst.
Revenu – CO(G)S
- EBIT = winst voor rente en belastingen.
Revenu – CO(G)S – operating expenses
Revenu – CO(G)S – SG&A
- EBITDA = winst voor rente, belastingen, afschrijvingen en
amortisatie.
EBIT + Depreciation & Amortization costs
Depreciation = tangible assets.
Amortization = intangible assets.
Depreciation/Amortization costs = (asset cost – salvage value)/life
span
Balance sheet
Assets = anything company owns with monetary value.
- Fixed = longer time: HQ, patent.
- Current = quick turnaround: goods, cash.
Liabilities = obligation that sacrifices future economic benefits:
mortgage (hypotheek), loans, payables.
- Equity = capital from others (stakeholders, founder).
Balance sheet terms
