Key ratios: asset structure

Question 1

Name all key ratios: asset structure

Answer 1

Fixed asset intensity: Fixed total assets x 100/ total assets
Current asset intensity: Current total assets x 100/ total assets
Asset structure: Non-currrent assets x 100/ Current assets
Fixed asset structure: Fixed assets x 100/ Current assets

Question 2

Fixed asset intensity

Answer 2

Fixed asset intensity: Fixed assets x 100/ total assets

• Depends on industry: retailers (low), energy sector (high)
• Provides information on the company’s ability to adapt to changing market conditions

> > > The higher the ratio, the longer financial funds are locked up and the higher the associated fixed costs -> more inflexible

Question 3

Fixed assets consist of

Answer 3

Fixed assets: intangible assets + PPE + leased assets

Question 4

Current asset intensity

Answer 4

Current asset intensity: Current assets x 100/ Total assets

• Shows the percentage of total capital which is locked up in current assets

> > > High ratio positive, as current assets can be liquidated quickly
But: extremely high ratio can indicate excessive stock levels -> push up warehousing costs

Question 5

Fixed asset structure

Asset structure

Answer 5

Fixed asset structure: Fixed assets x 100/ Current assets
Asset structure: non-current assets x 100/ Current assets

• Both show a companys stability/ flexibility

> > > Low asset structure: low level of fixed assets -> more flexible to react to changes on the market + fixed costs are lower due to shorter capital lock-up period for all assets

But: company is working with assets that have already been written off -> alllows to assume that the technology used is out of date