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Definition

A term which describes those businesses which use huge amounts of capital to make a profit. Maybe they have plant, machinery and land tied up in their production process. Obviously, having all this money tied up in capital items increases the risk of the business because it will have to pay interest on that money - whether it is profitable or not. Service companies have the great advantage that they are usually not capital intensive. It is said of service companies that their "assets get into their cars at night and go home".

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