What it is:
Per capita measures help analysts and investors get a better feel for whether a company, country, or other entity is productive, efficient, or profitable. For instance, the per capita measure of indicates whether the country’s workforce is generally becoming more or less productive – that is, whether the country’s workforce is efficiently producing goods and services that consumers want.
How it works/Example:
For example, per capita gross domestic product (GDP) per person. The formula for per capita GDP is:
Per Capita GDP =Gross Domestic Product/Population
So, let's assume that Country XYZ has $100 trillion in gross domestic product and 250 million people. According to the formula, Country XYZ's per capita is:
Per Capita GDP = $100,000,000,000,000/250,000,000 = $400,000
Why it matters:
Per capita is a measure of a quantity per person.