Operating Coverage Below Reference
Working Capital / base / 1 to 3 months
What it detects
Annual operating coverage is below the retained reference line. With matched beginning and ending balance sheets, the engine uses net income plus depreciation less the change in noncash operating working capital. Without matched balances or net income it retains an explicitly labeled operating-income proxy. Identifiable deferred revenue is excluded from the denominator because it represents delivery owed rather than a future cash payment.
Why it matters
Accrual profit can coexist with cash tied up in receivables or inventory. The indirect bridge makes that working-capital movement visible. A prepaid business should not be judged as though all deferred revenue must be paid out in cash.
Severity levels
- MEDIUM
- HIGH
Thresholds
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
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.