Capital-intensive business

A capital-intensive business is one that requires a large amount of money tied up in physical assets, such as factories, equipment, or infrastructure, relative to its revenue, in order to operate. Airlines, semiconductor manufacturers, and utilities are common examples.

Capital-intensive businesses typically show up with heavy capital expenditure and a large asset base on the balance sheet, and comparing their valuation or return ratios directly to an asset-light business, such as a software company, can be misleading without accounting for how differently capital is deployed in each.