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 ratio of sales to current assets.
D)The ratio of current assets to sales.
E)The amount of assets required per dollar of sales, or A0*/S0.

Question

Quizplus · Accepted Answer

Capital intensity ratio is the amount of assets required per dollar of sales, or A0*/S0. This means that the ratio measures how much investment in fixed assets is required to generate a dollar of sales. Therefore, option E is the correct choice.

Capital Intensity Ratio Is Generally Defined as Follows