Abstract
Capital intensity indicates how much money is invested to produce one rupee of sales revenue. Business tangible properties or tangible assets are real things that a company has such as-buildings or equipment. Capital intensity and tangibility has the vital role in the firms‘ financial-performance. This paper addresses to explore the impact of capital intensity and tangibility on the firms‘ financial performance. For the purpose of analyzing data in this research, the sample was selected on the availability of data in range from 2007 to 2011, for banking and insurance companies listed in Colombo Stock Exchange (CSE). Capital intensity is represented by the capital intensity ratio which is calculated by dividing the Total assets by the sales and the Tangibility is represented by the Total Debt Ratio and Debt to Equity Ratio. The financial performance of the firm represented by the Profit Margin (PM), Return on Assets (ROA) and Return on Capital Employed (ROCE). To find out the association and impact of the variables the correlation and regression analysis has been made by using Statistical Package for Social Science (SPSS). The findings of this study revealed that there is a significant relationship between the Capital Intensity and tangibility and the financial performance. It means that the-firm‘s capital intensity and tangibility increases it will significantly affect to increasing firm‘s-financial performance and future stability, and the financial mangers always act to increase-firm‘s value in order to maximize the shareholders wealth.
Published Version
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