Economics - How are revenues generated? - Billing Rate

5 important questions on Economics - How are revenues generated? - Billing Rate

How can you calculate the Billing Multiple?

Billing rate per hour divided by the total (average) compensation per hour.

What happens if a firm is able to find a way to deliver its service with a higher proportion of juniors to seniors than its competitors?

Then it will be able to achieve lower costs and a higher Billing Multiple - project team structure is important to firm profitability.

What does a better Billing Multiple derive from?

Competitive project rates.
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The Billing Multiple relates to the firm-level break-even, how?

If the total costs of a PSF are equal to the Billing Multiple, then the PSF will attain break-even.

How do you calculate the break-even billing multiple?

Total cost/utilisation rate

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