![]() 1.69 LO3: Capital Intensity Ratio Level: Intermediate Ross - Chapter 004 266 Type: Problems 267. ![]() This ratio designs the continuous elevation of capital factors linked to a unit labor factors (Eq. ![]() What is the capital intensity ratio at full capacity A.59 B.93 C. The explanatory variable in our model is the capital intensity (CI), which is determined by the increasing of the ratio (capital/labor) of the economy (Antony 2009 Chen et al. The firm is operating at 80 percent of capacity. (a) Earnings per share = Net profit/ Total number of shares Net profit = (retained earning + cash dividends) Net profit = 639,000 + 60,000 Net profit = 699,000 Earnings per share = Net profit/ Total number of shares Earnings per share = 699000/710000 Earnings per share = $0.9845 Earnings per share = $0.98/share Dividends per share = Cash dividends/ Total number of shares Dividends per share = 60000/710000 Dividends per share = 0.0845 Dividends per share = $0.08/share Book value per share = Ending total equity/ Total number of shares Book value per share = (7,340,000 /710,000) Book value per share = 10.34 Book value per share = $10.34/share (b) Market to Book ratio = Market price / Book price Market to Book ratio = 30.40/10.34 Market to Book ratio = 2.94 times Price to earnings ratio = Price / earnings per share Price to earnings ratio = 30.40/0.9845 Price to earnings ratio = 30.88 Price to earnings ratio = 30.88 times (c) Price to sales ratio = (price per share/ Sales per share) Sales per share = (Total Sales / Total current shares) Sales per share = (10,640,000 / 710,000) Sales per share = 14.9859 Sales per share = $14.99/share Price- Sales ratio = (Market price/ Sales per share) Price- Sales ratio = (30.40 / 14.99) Price- Sales ratio = 2.03 Price- Sales ratio = 2. From the employment point of view capital intensity is generally defined as the ratio of capital to labour used in a production process or industry at a. Roy and Flos Flowers has 1,300 of sales and 1,755 of total assets.
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