Capital Intensity Ratio

The ratio of total purchased inputs (services, energy, and materials) to revenue, expressed as a percentage. Purchases intensity measures how dependent a business is on external inputs and how efficiently it converts purchased resources into value.

Funds spent to acquire, upgrade, or maintain physical assets such as property, plant, and equipment. CapEx is capitalised on the balance sheet and depreciated over time, in contrast to operating expenditure which is expensed immediately.

A valuation ratio comparing a company's market capitalisation to its book value. A P/B ratio significantly above 1.0 indicates that the market recognises substantial value beyond what is recorded on the balance sheet, typically reflecting intangible assets.

A valuation ratio comparing a company's share price to its earnings per share. The P/E ratio indicates how much investors are willing to pay for each pound of earnings and is influenced by growth expectations, risk profile, and the strength of intangible assets.

The ratio of total value returned (realised plus unrealised) to total capital invested. A MOIC of 3.0x means the investment has generated three times the original capital.

The level of revenue at which total costs equal total income, resulting in neither profit nor loss. For growth businesses, understanding break-even informs decisions about pricing, unit economics, and the capital required to reach profitability.

A financial leverage ratio calculated by dividing total debt by total shareholders' equity, indicating the relative proportion of debt and equity financing in a company's capital structure. A higher ratio indicates greater financial leverage and potentially higher financial risk, while a lower ratio suggests more conservative financing.

The systematic monitoring and management of a collection of investments. For VC and PE firms, portfolio oversight includes tracking financial performance, productivity metrics, intangible asset development, and strategic milestones across all portfolio companies.

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What is the intangible asset intensity ratio and how is it used?

The intangible asset intensity ratio measures intangible assets as a percentage of total assets or enterprise value, indicating how dependent a company's value is on non-physical assets.

How does Opagio's intangible asset benchmarking compare companies?

Opagio benchmarks companies by comparing their intangible asset composition, investment levels, and estimated values against industry peers and cross-sector averages using normalised metrics.