The Big Four firms broke the two-year “losing streak” related to the group's revenue growth rate.
The four largest accounting firms have an actual composite revenue growth rate for the group for FY11:
It is the highest revenue growth rate for the Big Four firms since FY07 (See chart, Big Four Revenue Chart )
The profession’s four largest firms collectively boosted revenues $2.68 billion to approximately $33.6 billion, according to ANR’s Big Four Analysis - 2012.
(Part I of the full analysis published in the Mar. 2 Issue of ANR.)
The average Big Four firm generated approximately $8.4 billion in U.S revenue for FY11.
Combined FY11 U.S. revenue for the Big Four firms surpassed the previous record of approximately $33.3
billion set in FY08. The results are a huge improvement over the past two years.
In FY10 revenue for the group declined 2.1% versus FY09. The drop for FY10 was actually an improvement over FY09 when combined revenue fell by 4.9% compared to FY08.
PwC was the analysis growth rate champ posting the fastest revenue growth rate, 10.1% followed by KPMG at 9.7% and Deloitte at 9.2%.
E&Y revenue grew the slowest of the four firms at 4.8%.
While one trend was broken, the back-to-back rates of revenue decline, another continued: Deloitte held onto the No. 1 position in the U.S. in terms of largest firm by U.S. revenue with nearly $12 billion in FY11 U.S. revenue.
With its Big Four peers divesting or spinning off consulting operations in the late nineties and early 2000s, while it did not, Deloitte has held the No. 1 ranking among the Big Four firms as far back as FY01.
The firm’s hold on the top spot is thanks, in large part, to revenue derived outside of A&A and tax.
Deloitte generated FY11 revenue of approximately $5.7 billion from practices categorized in the MCS or other revenue category. PwC and Ernst & Young each reported $2 billion or more of revenue in the MCS and other categories. KPMG
does not report revenue in the MCS and other categories.
Each of the firms had healthy years outside of traditional audit and tax. That fact shouldn’t be too much of a surprise given the number of acquisitions the firms made in the consulting arena in just the past fiscal year. The Big Four firms collectively added no less than 11 consulting pieces to their operations in FY11.
Not only is Big Four revenue climbing but so is the other key metric: people.
The Big Four firms, combined, boast 9,320 U.S. partners, 98,602 U.S. professionals and a total U.S. headcount of 133,033 in FY11.
The partner and professional categories both increased between FY11 and FY10. The cumulative partner figure for the Big Four firms in FY11 rose slightly, 1.9% to 9.320. The cumulative FY11 professionals figure rose nearly 11,000, 10,991 to be exact, compared to FY10.
With the relatively small percentage increase in partner headcount and the large increase in professionals both moves affected the revenue per metrics for the groups.
Big Four revenue per partner for FY11 rose 6.6% compared to revenue per partner for FY10. Deloitte has the largest revenue per partner: $4,136,868. It marks the second straight year the firm has led its peers in revenue per partner.
The Big Four professional headcount jumping 12.5% compared to the number of professionals in FY10 pulled down the revenue per professional figure 3.4% compared to FY10 figures.
E&Y has the largest revenue per professional figure: $386,598. The firm has led its peers in revenue per professional in each of the last four FYs.
With overall partner and professional figures on the rise, it stands to reason that total staffing figures also are on the upswing.
The Big Four collective headcount rose 9.8% in FY11 compared to FY10 figures.
E&Y has the largest revenue per staff member figure: $283,019. The firm has led its peers in revenue per professional in each of the last four FYs.
As was the case the case in looking at revenue per people metrics, the surge in professionals and to an extent staff (professionals are a large portion of the staff headcount) coupled with a smaller percentage increase in partner/professional ratios and voila: the partner/staff ratios are on the rise.
In FY11 there was one Big Four partner for every 10.58 professionals. In FY10 there was one Big Four partner for every 9.58 professionals.
This is an excerpt of the story that was published in the Mar. 2, 2012 issue of Accounting News Report. The issue contains detailed key data charts related to each of the Big Four firms and charts covering the firms rankings in key data points.
For more information on Accounting News Report: contact Jonathan Hamilton 702-283-9985.