Question

The capital intensity ratio is generally defined as follows: a. Sales divided by total assets, i.e., the total assets turnover ratio. b. The percentage of liabilities that increase spontaneously as a percentage of sales. c. The amount of assets required per dollar of sales, or A0*/S0. d. The ratio of current assets to sales. e. The ratio of sales to current assets.

Answer 1

Answer:

c. The amount of assets required per dollar of sales

Explanation:

Capital Intensity Ratio = Total Assets / Total revenue

Or

Capital Intensity Ratio = Capital Expenditure / Labour Cost

Please comment, if any further assistance si required.

Answer 2

The capital intensity ratio is generally defined as c. The amount of assets required per dollar of sales, or A0*/S0.

What is the capital intensity ratio?

The capital intensity ratio is the ratio of total assets to the sales revenue.

The ratio measures financial efficiency.

That is, using the capital or asset intensity ratio, a firm can determine how well it is utilizing its assets to generate sales.

Thus, the capital intensity ratio is generally defined as c. The amount of assets required per dollar of sales, or A0*/S0.

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