AI.FO
← Back to the signal library
C2

Margin–Capacity Trap

Composite / composite / 3 to 6 months

What it detects

Margins are compressing while utilization is already maxed, there is no operational lever to escape the problem.

When it fires

Growth Destroying Margin (S8) + capacity-ceiling constraint (fires when utilization >= ~[redacted]% AND ceiling within [redacted] months, not the hiring-capacity signal)

Why it matters

If you can't grow revenue (maxed on delivery capacity) and you can't cut costs (margins already thin), you're trapped. Adding capacity costs money you don't have margin to support. Not adding capacity means you can't grow out of the problem.

What it looks like in practice

Every consultant is fully booked. New deals are being turned away or delayed. But the work you are doing has [redacted]% margin, below the [redacted]% floor. Hiring another person makes the margin problem worse. Not hiring means you can't grow revenue. You're stuck.

Severity levels

  • HIGH

Thresholds

  • UTILIZATION_CEILING

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

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.

Get accessSee the nightly proof