Which measure is typically considered Non-Additive?

Non-additive measures are those that cannot be reliably added together across different dimensions. Ratios, such as profitability percentages, fall into this category because they are derived from multiple data points, consisting typically of a numerator and a denominator. Simply summing percentages across a dataset does not yield a meaningful result, as the base for each ratio may vary, leading to potential misinterpretations.

For example, if you were to add profitability percentages from different products or departments without considering the context of the total revenues or expenses related to each, the combined figure may suggest a false impression of overall profitability. Thus, these ratios rely on the specific context of their calculation, which makes them non-additive.

In contrast, total sales figures and the number of transactions are additive, as they represent aggregate totals that can be directly summed across different categories. Similarly, employee headcount, while affected by changes in staffing levels, can also be summed across departments or teams, yielding straightforward totals.