Video: Productivity Ratios

In this lesson, you'll join Nick Palazzolo, CPA, as he dives into the world of productivity ratios with a special focus on external benchmarking productivity measures. He begins by defining benchmarking and its application in comparing the performance of a company against competitors or past performances. Thereafter, Nick walks you through key formulas essential for mastering productivity ratios, including the total factor productivity ratio and the partial productivity ratio, and explains the significance of each in context. Using an engaging example of a handcrafted wooden rocking chair company, he breaks down the calculation of these ratios, making the concepts clear and connecting them to practical scenarios you might encounter on the exam. Expect to leave this lesson with a thorough understanding of how to measure productivity and compare inputs, whether it be the total cost of materials or specific inputs like wood or nails.