Stress Scanner
What breaks first under plausible stress?
Additional derived signals may emerge during analysis based on company-specific findings.
The Stress Scanner stress-tests a company's capital structure to identify vulnerabilities that could surface during adverse conditions — rate shocks, margin compression, or volume declines.
This lens asks: "If things go wrong, what covenant trips first? What debt matures at the worst time? How much buffer exists before real problems emerge?"
Signals Produced
What This Lens Catches
Maturity wall
Example: Large debt maturities concentrated in 18-24 months
Look for: Debt schedule by year
Covenant tightness
Example: <15% headroom to key covenants
Look for: Covenant calculations, credit agreement terms
Variable rate exposure
Example: Large floating rate debt during rising rates
Look for: Fixed vs. floating mix
Aggressive buybacks
Example: Levering up to buy back overvalued stock
Look for: Debt-funded buyback patterns
Empire building
Example: Acquisitions destroying value, increasing leverage
Look for: M&A track record, goodwill accumulation
Prudent deleveraging
Example: Paying down debt, maintaining flexibility
Look for: Debt reduction trajectory
Analysis Stages
Capital Structure Mapping
What debt exists and what are its terms?
Covenant & Maturity Analysis
Where are the pressure points?
Stress Scenario Modeling
What breaks under plausible stress?
Capital Allocation Assessment
Is management deploying capital wisely?
When This Lens Applies
Apply When
- Net Debt/EBITDA > 1.5x
- Material debt maturities in next 3 years
- Capital-intensive business model
- Recent leveraging transactions (LBO, recapitalization)
- Credit rating below investment grade
Skip When
- Net cash position (no debt)
- Minimal leverage with strong coverage (Net Debt/EBITDA < 0.5x)
- No debt maturities in foreseeable future
- Assess accounting manipulation (that's Fugazi Filter)
- Assess operational turnaround potential (that's Roadkill Radar)
- Assess competitive position (that's Moat Mapper)
- Make buy/sell recommendations
- Provide credit ratings