Capex Intensity
Calculate the capital expenditure intensity, the share of revenue a company reinvests in property, plant and equipment.
Capex intensity shows how capital-heavy a business is: utilities, telecoms, semiconductor manufacturers and energy producers spend a large part of their revenue on capital expenditure, software and services companies very little. Over time a rising intensity points to an investment cycle (capacity being built ahead of revenue), a falling one to a business that is harvesting its existing assets. Damodaran uses it, together with the capex to depreciation ratio, to judge how much a company has to reinvest to grow.
The formula is as follows:
\[\text{Capex Intensity} = | \text{Capital Expenditure} | / \text{Revenue}\]Capital expenditure is reported as a negative cash outflow, so its magnitude is used. A revenue of zero or less gives NaN.
Also known as: capex to revenue, capex to sales, capex ratio, capital spending intensity.
Capex Intensity in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_capex_intensity as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["TSM", "INTC", "MSFT"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_capex_intensity()
Or, after setting up the Finance Toolkit MCP, ask:
How much of their revenue did TSMC, Intel and Microsoft spend on capital expenditure in each year from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| INTC | 0.2573 | 0.3973 | 0.4748 | 0.4509 | 0.2771 |
| MSFT | 0.1227 | 0.1205 | 0.1326 | 0.1814 | 0.2291 |
| TSM | 0.5351 | 0.4813 | 0.442 | 0.3303 | 0.3367 |
Parameters
get_capex_intensity accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows. | 4 |