The Capital Intensity Ratio Is Generally Defined as Follows

question 37

Multiple Choice

The capital intensity ratio is generally defined as follows:

• A) The percentage of liabilities that increase spontaneously as a percentage of sales.
• B) The ratio of sales to current assets.
• C) The ratio of current assets to sales.
• D) The amount of assets required per dollar of sales, or A₀*/S₀.
• E) Sales divided by total assets, i.e., the total assets turnover ratio.

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Definitions:

Election

The process through which individuals select their leaders or decide on matters of public policy through voting in a democratic society.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.

Paid-In Capital

Paid-in capital represents the funds raised by a company through the issuance of shares to shareholders, exceeding the par value of the shares.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its owners as dividends.