Stephanie Gan asked 1 year ago
Hi The Fifth Person, I have some questions on the Asset Intensity ratio calculation. Hope you can assist, thanks.
- Why are inventories considered as fixed asset for this calculation?
- Why are non-current assets, other than property, plant, and equipment (net), not included as fixed assets in the calculation of the Asset Intensity ratio?
1 Answers
Victor Chng Staff answered 1 year ago
Hi Stephanie,
1. Inventories are fixed assets that a company must invest in to run the business. This is especially true for retail businesses.
2. PPE is an asset that the business consistently invests in to keep it going. It is usually the main capital expenditure.
1. Inventories are fixed assets that a company must invest in to run the business. This is especially true for retail businesses.
2. PPE is an asset that the business consistently invests in to keep it going. It is usually the main capital expenditure.
Stephanie Gan
replied 1 year ago Thanks Victor.
Victor ChngWelcome Stephanie :)
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