CompanyGraph
Use to find companies where this pattern is active.
Three asset-side observations align: depreciation is elevated, accumulated depreciation is a large share of gross properties, and total assets decreased year-over-year over the trailing four years. Together they describe a well-depreciated asset base that has been shrinking.
State
Apparent low capex with structural asset age risk
Emergence
Three asset-side observations align. Depreciation is elevated, accumulated depreciation is a large share of gross properties, and total assets have decreased year-over-year over the trailing four years. The composition note: the existing asset base is well-depreciated and shrinking, with ongoing depreciation charges meaningful relative to the asset base.
Limits
This interpretation identifies an asset-age composition pattern, not asset failure or capex-timing prediction. It does not claim assets will fail, predict replacement timing, measure asset productivity, or assess whether current capex spending is adequate. Some businesses genuinely require less capital investment.
Explanation
This diagnostic clarifies an asset-composition reading: Surface reading: Stable apparent capital position suggests an asset-light or efficient business. Structural reality: Depreciation Intensity is elevated — depreciation charges are large relative to the business. Accumulated Depreciation to Properties is high — existing assets are well-depreciated. And Total Assets Decreased Year-Over-Year (4 years) indicates the asset base has been shrinking. The combination reveals a well-depreciated and contracting asset base. Whether worn assets will require replacement spending and when is not directly observed.
Interpretation
Co-occurrence of a low-capex reading with asset-age readings. The formulas record present-period accounting; they do not assess capital strategy or predict spending needs.
Required Observations
Accumulated Depreciation To Properties
Accumulated depreciation as fraction of gross property, plant and equipment
Depreciation Intensity
Depreciation as a fraction of operating cash flow, vs industry peers
Total Assets Decreased Yoy 4y
Total assets have decreased year-over-year across the most recent 4 fiscal years.