Leverage / base / 1 to 3 months
whether what the owner takes out of the business is consistent with what the business generates, read in both directions. Leg A (over-extraction) fires when owner cash out (salary, guaranteed payments, draws, and distributions over a trailing window) runs ahead of the operating cash flow that funds it AND owner equity declined across the same window, so the business is being decapitalized while the profit and loss statement still looks acceptable. Leg B (under-payment) fires when the working owner is paid materially less than the company pays for comparable labor it hires, so reported profit is absorbing an unpriced labor subsidy and the margin the owner manages against is overstated. This is a READ of a relationship between two numbers already in the books: it does NOT opine on reasonable compensation, perform the IRS reasonable-compensation analysis, price equity, value the business, or judge whether a distribution was lawful. The full specification, primitives, and the derivation of every constant live in Part [redacted] under "Owner-Pay Sustainability"; this section is the base-signal summary.
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
This signal reports not applicable when owner cash movements cannot be told apart from ordinary payroll and equity, because unlabeled accounts are not evidence. Each leg is otherwise suppressed on its own when the inputs that leg needs are absent.
The owner-benchmark leg needs an owner-versus-employee split of headcount and payroll that a QuickBooks export does not carry, so that leg is always suppressed for a QuickBooks-ingested company while the over-extraction leg still evaluates from the same import. An unevaluated leg is never treated as a passing leg.
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.