What are some examples of capital intensive production?

Examples of capital-intensive industries include automobile manufacturing, oil production, and refining, steel production, telecommunications, and transportation sectors (e.g., railways and airlines). All these industries require massive amounts of capital expenditures.

What is the total asset turnover and the capital intensity?

Total Asset Turnover = Net Revenues / Total Assets While the capital intensity ratio of business signifies how much assets it has used to generate $1 in revenue, the total asset turnover shows how much revenues the business has generated for every $1 in assets.

How do you calculate total asset turnover from capital intensity ratio?

This means you can divide either the total asset turnover ratio or the capital intensity ratio by 1 to figure the other ratio. In the example above, the reciprocal of the 0.5 capital intensity ratio is 1 divided by 0.5, or 2 — the total asset turnover.

How do you calculate capital intensive production?

Capital intensity ratio of a company is a measure of the amount of capital needed per dollar of revenue. It is calculated by dividing total assets of a company by its sales. It is reciprocal of total asset turnover ratio.

What does it mean to have high PPE turnover?

It’s a measure of how efficient you are at generating revenue from fixed assets such as buildings, vehicles, and machinery. The higher our PPE Turnover, the more efficient we are with our capital investments.

How does property plant and equipment ( PPE ) turnover work?

Property, Plant, & Equipment (PPE) Turnover. Definition: This ratio tells you how many dollars of sales your company gets for each dollar invested in property, plant, and equipment (PPE). It’s a measure of how efficient you are at generating revenue from fixed assets such as buildings, vehicles, and machinery.

What does the PPE ratio tell you about a company?

This ratio tells you how many dollars of sales your company gets for each dollar invested in property, plant, and equipment (PPE). It’s a measure of how efficient you are at generating revenue from fixed assets such as buildings, vehicles, and machinery. The higher our PPE Turnover, the more efficient we are with our capital investments.

What does it mean when a company is investing in pp & E?

A company investing in PP&E, also called a capital investment, is a good sign for investors. A fixed asset is a sizable investment in a company’s future. PP&E are a company’s physical assets that are expected to generate economic benefits and contribute to revenue for many years.