Examples of capital intensity ratio in the following topics:

 Return on assets gives us an indication of the capital intensity of the company.
 "Capital intensity" is the term for the amount of fixed or real capital present in relation to other factors of production, especially labor.
 The use of tools and machinery makes labor more effective, so rising capital intensity pushes up the productivity of labor.
 Capital intensity can be stated quantitatively as the ratio of the total money value of capital equipment to the total potential output.
 In other words, changes in the retention or dividend payout ratios can lead to changes in measured capital intensity.

 The return on assets ratio (ROA) is found by dividing net income by total assets.
 This ratio measures how much each dollar in asset generates in sales.
 A higher ratio means that each dollar in assets produces more for the company.
 Companies that operate in capital intensive industries will tend to have lower ROAs than those who do not.
 The return on assets ratio is net income divided by total assets.

 The debt ratio is expressed as Total debt / Total assets.
 Financial ratios are categorized according to the financial aspect of the business which the ratio measures.
 Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition, are usually hard to compare.
 The higher the ratio, the greater risk will be associated with the firm's operation.
 Like all financial ratios, a company's debt ratio should be compared with their industry average or other competing firms.

 A publicly traded company's stock price can also be a variable used in the computation of certain ratios, such as the price/earnings ratio.
 As with quality of sales, high levels for this ratio are desirable.
 Capital Acquisition Ratio = (cash flow from operations  dividends) / cash paid for acquisitions.
 The capital acquisition ratio reflects the company's ability to finance capital expenditures from internal sources.
 A ratio of less than 1:1 (100 %) indicates that capital acquisitions are draining more cash from the business than they are generating revenues.

 Times interest earned ratio (Interest Coverage Ratio): EBIT / Annual interest expense
 Return on assets (ROA ratio or Du Pont Ratio): Net income / Average total assets
 Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition are usually hard to compare.
 Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition are usually hard to compare.
 Ratio analysis includes profitability ratios, activity (efficiency) ratios, debt ratios, liquidity ratios and market (value) ratios

 Current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months.
 The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months.
 In such a situation, firms should consider investing excess capital into middle and long term objectives.
 This can allow a firm to operate with a low current ratio.
 If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio.

 The pricetobook ratio is a financial ratio used to compare a company's current market price to its book value.
 The pricetobook ratio, or P/B ratio, is a financial ratio used to compare a company's current market price to its book value.
 In the first way, the company's market capitalization can be divided by the company's total book value from its balance sheet.
 Industries that require more infrastructure capital (for each dollar of profit) will usually trade at P/B ratios much lower than, for example, consulting firms.
 It is also known as the markettobook ratio and the pricetoequity ratio (which should not be confused with the pricetoearnings ratio), and its inverse is called the booktomarket ratio.

 Companies determine what kind of investors they want to attract and the investment opportunities they face before setting the target payout ratio.
 The Target Payout Ratio, or Dividend Payout Ratio, is the fraction of net income a firm pays to its stockholders in dividends.
 Investors seeking high current income and limited capital growth prefer companies with high Dividend Payout Ratios.
 High growth firms in early life generally have low or zero payout ratios.
 For smaller growth companies, the average payout ratio can be as low as 10%

 The WACC is the cost of capital taking into account the weights of each component of a company's capital structure.
 The weighted average cost of capital (WACC) is the rate a company is expected to pay, on average, to its security holders.
 Stated differently, the return on capital of a new project must be greater than the weighted average cost of capital.
 As the above equation states, the cost of debt, rD(1  T), is multiplied by the ratio of debt to total market value of the company.
 This is then added to the cost of equity, rE , multiplied by the ratio of equity to total market value.
