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Math  /  Data & Statistics

QuestionCalculate the Capital Intensity Ratio given the following information: Asset =1.5M=1.5 \mathrm{M} Sales =3M=3 \mathrm{M} Income =0.5M=0.5 \mathrm{M} CapEx = 1 M Debt =.5M=.5 \mathrm{M} Equity = 1 M

Studdy Solution

STEP 1

1. The Capital Intensity Ratio is defined as the ratio of total assets to sales.
2. The provided values are in millions, but units are consistent and do not affect the ratio.

STEP 2

1. Identify the formula for the Capital Intensity Ratio.
2. Substitute the given values into the formula.
3. Calculate the Capital Intensity Ratio.

STEP 3

Identify the formula for the Capital Intensity Ratio:
The Capital Intensity Ratio is given by:
Capital Intensity Ratio=Total AssetsSales\text{Capital Intensity Ratio} = \frac{\text{Total Assets}}{\text{Sales}}

STEP 4

Substitute the given values into the formula:
Given: - Total Assets = 1.5 M1.5 \, \text{M} - Sales = 3 M3 \, \text{M}
Substitute these values into the formula:
Capital Intensity Ratio=1.53\text{Capital Intensity Ratio} = \frac{1.5}{3}

STEP 5

Calculate the Capital Intensity Ratio:
Capital Intensity Ratio=1.53=0.5\text{Capital Intensity Ratio} = \frac{1.5}{3} = 0.5
The Capital Intensity Ratio is:
0.5 \boxed{0.5}

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