Capital Intensity Ratio

A measure of how effectively a company allocates capital to generate returns, calculated as net operating profit after tax divided by invested capital. ROIC above the cost of capital indicates value creation; below it signals value destruction.

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.

The proportion of a company's total assets or total investment that is attributable to intangible assets. A high intangible asset intensity — common in technology, pharmaceutical, and professional services firms — indicates that value creation is driven primarily by knowledge, data, and relationships rather than physical capital.

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 metric that measures the financial return generated per unit of human capital expenditure, typically calculated as adjusted profit divided by total compensation and benefits costs. HCROI enables firms and investors to evaluate workforce productivity and benchmark the efficiency of human capital deployment across organisations.

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.

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.

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.