Capital Intensity Ratio Calculator

What is the Capital Intensity Ratio?

The Capital Intensity Ratio (CIR) is a financial metric that measures how efficiently a company is using its assets to generate revenue. It shows how much in sales revenue is generated per dollar of assets.

How to Use This Calculator

1. Enter your company's Total Assets in dollars (the total value of all assets on the balance sheet).
2. Enter your company's Net Sales in dollars (total revenue from sales minus returns, allowances, and discounts).
3. Click the Calculate button to compute the Capital Intensity Ratio.
4. Review the result and interpretation to understand your company's asset utilization efficiency.

Calculation Formula

The Capital Intensity Ratio is calculated using the following formula:

CIR = Total Assets / Net Sales

Interpretation of Results

• A lower CIR indicates greater efficiency in using assets to generate revenue
• A CIR below 0.5 is generally considered good, suggesting efficient asset utilization
• A CIR between 0.5 and 1.0 is generally considered acceptable
• A CIR above 1.0 may indicate potential areas for improvement in asset utilization

Example

If a company has total assets of $5,000,000 and net sales of $10,000,000, the Capital Intensity Ratio would be:

CIR = $5,000,000 / $10,000,000 = 0.5

This result would be considered acceptable, as the company generates $0.50 in sales for every dollar of assets.