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Capital intensity is the amount of fixed or real capital present in relation to other factors of production, especially labor. At the level of either a production process or the aggregate economy, it may be estimated by the capital to labor ratio, such as from the points along a capital/labor isoquant .
Payout Ratio: The percentage of earnings distributed as dividends, with the rest reinvested in the company. [3] In Finance knowing calculation is not enough it's great if you understand the whole AFN equation with a business case scenario. The relevant ratios within the formula are: (A*/S 0): Called the capital intensity ratio
Capital deepening is a situation where the capital per worker is increasing in the economy. [1] This is also referred to as increase in the capital intensity. Capital deepening is often measured by the rate of change in capital stock per labour hour. Overall, the economy will expand, and productivity per worker will increase.
An empirical proxy measure for the technical composition of capital (TCC) is the average amount of fixed equipment and materials used per worker (capital intensity), or the ratio of the average amount of equipment & materials used to the total hours worked.
Labor-capital ratio: the relationship between employment and capital stock. [clarification needed] This ratio indicates the relative use of factors in an activity and the extent to which it is labor-intensive compared to capital-intensive. [5] The ratio between employment and value added, which indicates the labor intensity of production.
It's a useful number for comparing competing companies in the same industry. The number will vary widely across different industries. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; companies that require large initial investments will generally have lower return on assets. ROAs ...
A valuation multiple [1] is simply an expression of market value of an asset relative to a key statistic that is assumed to relate to that value. To be useful, that statistic – whether earnings, cash flow or some other measure – must bear a logical relationship to the market value observed; to be seen, in fact, as the driver of that market value.
Solow extended the Harrod–Domar model by adding labor as a factor of production and capital-output ratios that are not fixed as they are in the Harrod–Domar model. These refinements allow increasing capital intensity to be distinguished from technological progress.