Capital intensity / Capital intensity ratio

The stability of a business is basically determined by the resources from which it finances its activities. Capital strength or capital adequacy shows how much of the company's assets come from self-funding.

A business is necessary for its operation source can be provided in several ways. It can be invested in the business by the owner capital or not taken out profit, respectively foreign resource (credit, loan or, for example, issued bond). 

The company's capital consists of different capital structures with pointers can be investigated. The most frequently used of these is capital strength or capital availability. The name speaks for itself: the capital adequacy ratio indicates how much of the company's assets (from all resources) equity ratio. Its value is the equity and the balance sheet total is equal to its quotient. 

A healthy amount depends on the nature of the activity, industry characteristics and size. In general, it can be stated that the higher the indicator, the less risky the business. A value below 25-30 percent can typically be evaluated as a critical level.