Sales efficiency (capex per $1 of new revenue)
Returns on capitalHow many dollars of additional property, plant, and equipment the company needed to generate each additional dollar of annual revenue over roughly five years.
Formula
Sales efficiency = change in net PP&E ÷ change in revenue, measured over a ~5-year window
Why it matters
Growth is only valuable if it does not consume more capital than it returns. This ratio asks a blunt question: to add a dollar of yearly sales, how much did the company have to bolt onto its fixed-asset base? Businesses that grow with little new physical capital (software, brands, marketplaces) convert growth into free cash flow almost immediately. Businesses that must build a plant for every increment of demand grow with a permanent cash tax attached.
What good looks like
Below 0.2 (twenty cents of new PP&E per new revenue dollar) is capital-light growth. 0.2–0.5 is moderate. Above 1.0 means each dollar of new revenue required more than a dollar of new fixed assets — acceptable only if the returns on that capital are demonstrably high. A negative value with growing revenue means the company grew while its asset base shrank, the best possible pattern.
Caveats
The measure only counts PP&E, so acquisitions, capitalized software, and leased assets escape it. It is undefined when revenue declined over the window. A company mid-way through a large build-out (data centers, new factories) looks temporarily inefficient even if the investment pays off later. Compare against the company's own history and direct peers, not across industries.