Maren's House of Pancakes has sales of $635,400, total equity of $268,000, and a debt-equity ratio of ..6.What is the capital intensity ratio?

Question

Quizplus · Accepted Answer

The capital intensity ratio is calculated as total assets divided by sales. First, calculate total assets using the debt-equity ratio: Total Debt = 0.6 * Total Equity = 0.6 * $268,000 = $160,800. Total Assets = Total Debt + Total Equity = $160,800 + $268,000 = $428,800. Capital Intensity Ratio = Total Assets / Sales = $428,800 / $635,400 ≈ 0.67.

Maren's House of Pancakes Has Sales of $635,400, Total Equity