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High Equity Share With Elevated Lease Share of Assets

High Equity Share With Elevated Lease Share of Assets

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BalanceSheetStrengthRiskInterpretation type: Diagnostic

Shareholders' equity is a large share of total assets; the Leases line is a large share of total assets and of non-current assets. The latter two share the same numerator (Leases) and tend to fire together.

State

High equity-to-assets co-occurs with elevated lease share of total assets and non-current assets

Emergence

Three balance-sheet ratios line up: shareholders' equity is a large share of total assets, the Leases line is a large share of total assets (scaled against 30%), and the Leases line is a large share of non-current assets (scaled against 50%). The latter two are near-duplicates — same numerator (Leases), different denominator (total assets vs non-current assets) — so they tend to fire together.

Limits

All three readings are balance-sheet snapshots from the most recent annual statement. The Leases line reflects accounting capitalization of lease liabilities; it does not measure the operational mix of owned vs leased equipment, nor the cash-flow burden of lease payments relative to operating cash flow. The equity-to-assets reading is the inverse of total liabilities (including operating and lease liabilities) relative to assets, not a debt-specific measure. Neither high lease share nor high equity share by themselves predicts financial difficulty.

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High Equity Share With Elevated Lease Share of Assets
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Explanation

Three balance-sheet ratios co-occur: - Equity Ratio (ratio-balance-equity): Total shareholders' equity as a fraction of total assets. High reading means total liabilities are low relative to assets — not debt-specifically. - Leases to Assets: Leases line as a fraction of total assets (mapped 0–30%). - Leases Weight: Leases line as a fraction of total non-current assets (mapped 0–50%). Near-duplicate of leases-to-assets with a different denominator. All three are snapshots from the most recent annual balance sheet. The Leases line is accounting capitalization, not an operational mix measure. The configuration does not by itself predict difficulty.

Interpretation

Co-occurrence of a high equity-to-assets reading with elevated lease share of total and non-current assets. The two lease readings share the same numerator (Leases). The formulas record balance-sheet snapshots; they do not measure operational mix or cash-flow burden.

Required Observations

Leases To Assets

Lease obligations relative to total assets

Leases Weight

Lease obligations relative to non-current assets

Ratio Balance Equity

Specific balance-sheet ratio benchmarked against industry (which ratio depends on the instance)

Related Interpretations

Goodwill-Heavy Equity

Equity ratio reads favorable, goodwill is a large share of total assets, and goodwill is large relative to shareholders equity

At Graham Number With Cash Backing And Equity

Current price is at or below the Graham Number model ceiling (√(22.5 × EPS × BVPS)) while OCF exceeds net income and equity is a large share of total assets

Down-Close Streak With Profitability

Multi-week run of falling weekly closes alongside three years of positive net income and an elevated industry-benchmarked equity ratio

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