Labor Multiplier

Definition

Labor Revenue divided by Direct Labor Cost Used to monitor rate schedule efficacy, WIP write-offs, and A/R write-offs as they affect profitability on the income statement.

Formula

Use Case / Interpretation

A Labor Multiplier of at least 2.5, but optimally 3.0 is necessary for sustainability.

Tags

profit, WIP, work in progress, income, revenue, cost, schedule

Metadata

Category: Business Consulting · Added: May 17, 2026