Employee's contribution to net profit

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anckoora (Querist)
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02 June 2012 Dear Sir,

Pl. go thro' my following calculation and give me your opinion/comment :
A partnership mfg firm employs 350 staff in all. In FY 11/12, it earned Net Profit of 2.15 Crs ( after deducting salary of 3.60 crs., partners' capital interest, partners' remuneration and depreciation). If we add all these in 2.15 Crs., amount of NP comes to 14 Crs.
This means every employee contributed to the net profit Rs.1290/- per day ( 14 Crs divided by 350 staff divided by 310 working days ). AM I RIGHT ?
This means that by working of 350 people, owners have earned 10.40 Crs. ( 14 Crs minus 3.60 Crs paid to employees by way of salary / bonus etc ) AM I RIGHT ?
PL. GIVE YOUR OPINION.
This shows, how important is employee in an organisation. THEY JUST TAKE 25% OF PROFIT OF 14 CRS. AND GIVE 75 % SHARE TO THEIR OWNERS. EVERY EMPLOYER SHOULD LOOK AT THIS AND SHOULD BE MORE LIBERAL IN GIVING INCREMENT, BONUS, PERKS, PROMOTIONS TO HIS EMPLOYEE.
Regards
anckoora

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 June 2012 The market forces decide the rate of Salary & Wages.
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Workers are not bound to remain in the same manufacturing concern. We often see labour turnover in every organisation. It's also not fair that the employer should be forced to retain the employee who is of no use to the business enterprise.
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Business always does not generate profits.
Even in the case of heavy business losses employers are bound to pay the decided Salary to the employees or work force.
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Still, I agree with your views about the welfare of the employees. The employers are
possessed with good business sense. A satisfied employee increases the profitability of the organisation.
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