What is computed by dividing the amount of assets tied directly to sales (A*) by the amount of current sales (S0)?
A) Capital intensity ratio
B) Current ratio
C) Quick ratio
D) Spontaneous assets

Question

Quizplus · Accepted Answer

The capital intensity ratio is computed by dividing the amount of assets tied directly to sales (A*) by the amount of current sales (S0). This ratio indicates how much in assets is needed to generate a dollar in sales, reflecting the company's capital intensity.

What Is Computed by Dividing the Amount of Assets Tied