Like others have mentioned, I&#x27;m very interested in how the author arrived at the ratio of &#x27;3&#x27;.  At the very least this ratio doesn&#x27;t take into account how capital intensive a company is, since fixed costs seem to be what&#x27;s left (my understanding could be wrong here depending on which definition of &#x27;margin&#x27; is being implied here).<p>Wouldn&#x27;t this imply that a company with a lower ratio that is not very capital intensive would have a higher &quot;corrected ratio&quot; than a company which is much more capital intensive (or even simply has a higher cost of capital)?