Capital intensive

Capital intensive,

Definition of Capital intensive:

  1. Industry requiring large sums of investment in purchase, maintenance, and amortization of capital equipment, such as automotive, petroleum, and steel industry. Capital intensive industries need a high volume of production and a high margin of profit (as well as low interest rates) to be able to provide adequate returns on investment. See also labor intensive.

  2. Capital-intensive industries tend to have high levels of operating leverage, which is the ratio of fixed costs to variable costs. As a result, capital-intensive industries need a high volume of production to provide an adequate return on investment. This also means that small changes in sales can lead to big changes in profits and return on invested capital.

  3. (of a business or industrial process) requiring the investment of large sums of money.

  4. The term "capital intensive" refers to business processes or industries that require large amounts of investment to produce a good or service and thus have a high percentage of fixed assets, such as property, plant, and equipment (PP&E). Companies in capital-intensive industries are often marked by high levels of depreciation.

How to use Capital intensive in a sentence?

  1. There was a lot of capital intensive and that was something we were always wary of because we didnt know if we could measure up.
  2. Capital-intensive petrochemical plants.
  3. The capital intensive project did require the help and investment of an angel investor who would effectively become our boss.
  4. Capital intensity can be measured by comparing capital and labor expenses.
  5. The capital intensity ratio is total assets divided by sales.
  6. Capital-intensive firms usually have high depreciation costs and operating leverage.
  7. You should try and make sure to do things that are capital intensive so that you can get the most profit from them.

Meaning of Capital intensive & Capital intensive Definition