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Use to find companies where this pattern is active.
Two observations co-occur: industry-benchmarked Capex/OCF is in its elevated range (capex consumes a high share of OCF relative to peers), and Capex/Depreciation exceeds 1.0 (gross capex outpaces the rate at which the existing asset base is being charged off). The configuration describes capex-heavy capital allocation at the current snapshot.
State
Industry-benchmarked Capex/OCF elevated and Capex above Depreciation
Emergence
Two observations co-occur. Capital expenditures relative to operating cash flow are in the elevated industry-benchmarked range — meaning capex consumes a high share of OCF relative to peers. Capital expenditures exceed depreciation (Capex/Depreciation > 1.0), meaning gross investment outpaces the rate at which the existing asset base is being charged off. The configuration describes a present-state of capex-heavy capital allocation relative to both peer cash generation and the existing asset base. The interpretation does not assess whether the spending is well-targeted, predict returns on invested capital, or indicate whether the level is appropriate for the business's stage.
Limits
Both observations are point-in-time. The Capex/OCF reading is industry-benchmarked, so 'elevated' means high relative to peers — capital-intensive industries cluster naturally at high readings. Capex/Depreciation > 1.0 indicates gross capex exceeds depreciation expense; this can reflect growth investment, replacement of fully-depreciated assets, or accounting choices around useful life and depreciation methods. Neither obs measures revenue intensity (capex/sales); revenue is not in the obs set.
Explanation
Each observation is an independent reading: Capex Intensity is |Capital_expenditures| / Operating_cash_flow, benchmarked against industry peers. An elevated reading means capex consumes a high share of OCF relative to industry. Note: this is NOT capex/sales — revenue is not in the formula. Capex to Depreciation Ratio compares gross capex to depreciation expense. A ratio above 1.0 indicates capex exceeds the depreciation run-rate. The two together describe present-state capex weight relative to both peer cash generation and the existing asset depreciation rate. They do not assess project quality, forecast returns, or measure capex/revenue.
Interpretation
This interpretation identifies reinvestment characteristics, not investment merit. It does not predict returns on invested capital, assess project quality, or indicate whether spending is optimal. Capital-intensive industries and growth-phase companies naturally exhibit high reinvestment.
Required Observations
Capex Intensity
Capital expenditures relative to operating cash flow, benchmarked against industry
Capex To Depreciation Ratio
Absolute capital expenditure as a multiple of depreciation