Capital intensity
Also called: capital-intensive, capital intensive
How much plant, equipment and other capital a business needs for each rupee of revenue.
Capital-intensive businesses carry high fixed costs, large depreciation and heavy reinvestment needs, which make profits sensitive to volumes and tend to hold down returns on capital unless the company has an advantage.
Learn more in these lessons
- Cyclical and capital-intensive businessesWhy do profits in cyclical industries swing so much, and how should you judge them?
- Commodity businessesHow do you analyse a company that sells a commodity?
Related terms
Spotted a mistake or something unclear? Report it by email. Here is how corrections work.