Which of the following best defines the term "capital intensity ratio"? 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 current assets to sales D)the amount of assets required per dollar of sales, or A*/S₀

Question

Quizplus · Accepted Answer

Capital intensity ratio is the amount of assets required per dollar of sales, or A*/S₀. It measures the level of capital investment required to generate a certain level of sales revenue. Therefore, among the given options, option D is the best definition of the capital intensity ratio.

Which of the Following Best Defines the Term "Capital Intensity