Watch the trend more than the level. A 1.3x DSCR that was 1.8x a year ago is a louder signal than a steady 1.2x. Load a company below and read the status labels first, then the trend in each one over the last four quarters.
| Ratio | Calculation | Value | Status | What it tells you |
|---|
Trend signals to watch
DSO rising faster than revenue means collections are slipping or sales are being pushed into the channel. DIO rising (fewer inventory turns) points to soft demand or obsolete stock. DPO stretching sharply means suppliers are financing the company, which lasts until they tighten terms. Capex below depreciation for several years makes free cash flow look better than it is, and the deferred spending comes due later. Revolver availability shrinking week over week, especially near a springing covenant, is usually the last warning before a crisis.
Runway (cash plus undrawn availability, divided by monthly net burn) is the simplest test. With less than 12 months of runway, start the financing conversation now. Below 6 months, the lender sets the terms.