Capital Investment Imbalance
Composite / composite / 6 to 12 months
What it detects
Fixed-asset stock relative to annual revenue falls outside the healthy PS benchmark band, signaling either under-investment in delivery infrastructure or capital tied up in assets relative to revenue. C9 is a balance-sheet stock variant of the same investment-adequacy concept S32 measures on a P&L flow basis. This read is not evaluated on a partial-year P&L.
When it fires
Fixed-asset intensity (`balanceSheet.totalFixedAssets` divided by `incomeStatement.netSalesAnnual`) is less than [redacted] percent (`underInvesting` branch) OR greater than [redacted] percent (`overInvesting` branch). The composite is two-sided: a firm can fire on either deviation from the [redacted] to [redacted] percent benchmark band. Emit location: `lib/financial-engine/src/financialEngine.js:[redacted]`.
Why it matters
A PS firm with fixed-asset intensity below [redacted] percent is unlikely to be replacing tooling, infrastructure, or delivery equipment at a rate that keeps pace with growth; the next major equipment failure becomes a forced crisis purchase. A PS firm with intensity above [redacted] percent has capital tied up in assets that could otherwise fund working capital, hiring, or growth runway; the asset base produces a fixed-cost drag without offsetting capacity.
What it looks like in practice
A $[redacted]M-revenue consulting firm carrying $[redacted]K in fixed assets sits at [redacted] percent intensity. The firm runs on aging equipment with no replacement-cycle plan, and balance-sheet decay is invisible until the equipment fails mid-engagement. A similar firm carrying $[redacted]K in fixed assets sits at [redacted] percent intensity. Equipment was acquired for a prior engagement that ended; the assets now drag on depreciation without producing offsetting revenue, and the firm cannot reallocate that capital to working capital or hiring without selling assets at a discount.
Severity levels
- MEDIUM
Thresholds
- FIXED_ASSET_INTENSITY_BAND_HIGH
- FIXED_ASSET_INTENSITY_BAND_LOW
- FIXED_ASSET_INTENSITY_OVER
- FIXED_ASSET_INTENSITY_UNDER
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
How it connects
[redacted]
Why these together
C9 reads no base signal. It is a stock-based composite that reads the balance sheet's fixed assets against annual revenue directly and fires on either side of the benchmark band, under-investing or over-investing. It is classed as a composite because it pairs with S32, the flow-based CapEx read, to triangulate the firm's investment posture across flow and stock; the two together detect conditions neither sees alone.
Sources
SEE IT ON REAL NUMBERS
The exact thresholds, the formula, and your own figures are in the authenticated app. See it against a real, simulated dataset for Integra Executive Services, our public demo company, or connect your own QuickBooks Online account.