What is Per Capita?
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 Does Per Capita Work?
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 Does Per Capita Matter?
Per capita is a measure of a quantity per person.