Like others have mentioned, I'm very interested in how the author arrived at the ratio of '3'. At the very least this ratio doesn't take into account how capital intensive a company is, since fixed costs seem to be what's left (my understanding could be wrong here depending on which definition of 'margin' is being implied here).

Wouldn't this imply that a company with a lower ratio that is not very capital intensive would have a higher "corrected ratio" than a company which is much more capital intensive (or even simply has a higher cost of capital)?