Equipment intensity and equipment intensity
The ratio of fixed assets to the total assets of an industry or company. If this ratio is higher than the average for the economy as a whole, the industry is said to be asset intensive (as opposed to labor intensive). Because changes in asset intensity indicate structural change in the economy, central banks monitor the corresponding data (from aggregated corporate balance sheets). – The informative value of investment intensity as an assessment yardstick for a bank (or for an individual company in general) is highly controversial, because intangibles are not taken into account at all. However, especially in the case of banks, intangibles usually play the decisive role for the success of the business. – See revenues, intangibles, goodwill. – Cf. ECB Monthly Bulletin of November 2013, pp. 89 ff. (detailed, textbook presentation).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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