# Stock Balance Sheet Review > Review a US-listed company's balance sheet health for an equity-research workup. Covers net-debt/EBITDA leverage, current ratio, cash runway, goodwill concentration and impairment history, DSO trend, inventory days, off-balance-sheet items (operating leases, contingent liabilities), and pension underfunding. Trigger when analyzing financial-statement risk at L4 of the seven-layer X-ray framework,… - **Type:** Skill - **Install:** `agentstack add skill-johnqtcg-awesome-skills-stock-balance-sheet-review` - **Verified:** Yes — security-reviewed for prompt injection and unsafe behavior - **Seller:** [johnqtcg](https://agentstack.voostack.com/s/johnqtcg) - **Installs:** 0 - **Category:** [AI & ML](https://agentstack.voostack.com/c/ai-and-ml) - **Latest version:** 0.1.0 - **License:** MIT - **Upstream author:** [johnqtcg](https://github.com/johnqtcg) - **Source:** https://github.com/johnqtcg/awesome-skills/tree/main/skills/stock-balance-sheet-review - **Website:** https://johnqtcg.github.io/awesome-skills/ ## Install ```sh agentstack add skill-johnqtcg-awesome-skills-stock-balance-sheet-review ``` Requires the [AgentStack CLI](https://agentstack.voostack.com/docs/cli). Works with Claude Code, Cursor, and any MCP-compatible agent. ## About # Stock Balance Sheet Review ## Purpose Read the balance sheet for survivability. Most retail investors ignore the balance sheet until a recession exposes the leverage they didn't price in. Surface leverage and liquidity risks, goodwill bombs from past M&A, working-capital deterioration that signals customer-credit pressure, and off-balance-sheet hooks that compound in stress. Output a structured Findings set with quantitative thresholds. ## When To Use - Orchestrator dispatches balance-sheet review (always-on in Standard / Strict depth). - User asks "is financially safe", "what's the debt situation", "can survive a recession". ## When NOT To Use - Earnings quality / cash flow → `stock-earnings-quality-review` - Business model → `stock-business-review` - Capital allocation history → `stock-management-review` - Competitive position → `stock-industry-review` ## Mandatory Gates ### 1) Execution Integrity Gate Read the balance sheet from the most recent 10-Q (more recent than 10-K). If only 10-K is available, note the date staleness in Execution Status. ### 2) Industry-Norm Gate Leverage tolerable for a utility is catastrophic for SaaS. Identify sector before applying thresholds. Default thresholds below are general; flag if your sector materially shifts them. ### 3) Off-Balance-Sheet Gate Read the "Commitments and Contingencies" footnote in every review. Operating leases were brought on-balance-sheet by ASC 842 (2019), but contingent liabilities, guarantees, and purchase obligations are still footnote-only. ### 4) Goodwill-History Gate A single goodwill impairment is a yellow flag; multiple is a red flag indicating chronic overpayment in M&A. Check 5-year impairment history, not just current year. ### 5) First-Hand Data Gate (mandatory) Cite debt, cash, lease, pension, goodwill, AR and contract-liability figures from the manifest's first-hand `financials.json` (SEC EDGAR XBRL, via `scripts/finlib/edgar.py`) or directly from the filing — never from a search snippet. Any leverage ratio you state (Net Debt/EBITDA etc.) must use the named-input formulas in `scripts/finlib/ratios.py` so it survives the orchestrator's 口径 lint gate; in particular **EV-based metrics require `total_debt` and `cash_and_sti`** (a net-cash company has EV below market cap). Tag any second-hand figure as such and lower confidence accordingly. ## Workflow 1. Load 10-Q balance sheet and 10-K notes (Commitments, Goodwill, Pension). 2. Run filing-pattern-gated scan. 3. Compute ratios: Net Debt / EBITDA (using TTM EBITDA from financial-history), Current Ratio, Goodwill / Total Assets, DSO, Inventory Days. 4. Compare to industry norms and to the company's 5-year history. 5. Emit Findings. ## Filing-Pattern-Gated Execution Protocol ### Execution Order 1. Locate balance sheet (10-Q latest), Goodwill note, Commitments note, Long-term debt note. 2. For each checklist item, locate the specific line/note. 3. **HIT** → compute ratio, compare to threshold, semantic-confirm. 4. **MISS** → mark NOT FOUND. 5. Report only Findings that breach thresholds OR show adverse trend. 6. Include `Filing pre-scan: X/Y items hit, Z confirmed`. ## Balance Sheet Checklist (9 Items) | ID | Item | Filing Section | Threshold | |---|---|---|---| | BS-01 | Net Debt / EBITDA | Long-term debt + Current portion − Cash; TTM EBITDA | Flag > 2× general; sector-aware (utility OK at 4×, SaaS bad at 2×) | | BS-02 | Current Ratio | Current Assets / Current Liabilities | Flag 30% — acquisition-driven; vulnerable to impairment | | BS-05 | Goodwill impairment history | 5-year notes "Goodwill impairment" | Flag > 0 impairments in 5y as yellow; > 1 = red | | BS-06 | DSO (Days Sales Outstanding) trend | AR / (Annual revenue / 365), 3-year trend | Flag rising > 10 days YoY without explanation in MD&A | | BS-07 | Inventory days trend (non-tech) | Inventory / (Annual COGS / 365) | Flag rising > 15% YoY (slowing sell-through / obsolete inventory risk) | | BS-08 | Off-balance-sheet items | "Commitments and Contingencies" note | Flag material guarantees, purchase obligations, or contingent liabilities | | BS-09 | Pension underfunding | Pension footnote (defined-benefit only) | Flag underfunded amount > 5% of market cap | ### Severity Rubric - **High**: Survivability-threatening. Net Debt/EBITDA > 4× in cyclical sector; cash runway 50% of assets; multiple recent impairments. - **Medium**: Adverse but manageable. Leverage rising; DSO trending up; contingent guarantee material but defined. - **Low**: Watch-list. Inventory days slightly elevated; pension modestly underfunded. ## Evidence Rules - Compute the ratio yourself; cite the source lines. - Include the threshold you're comparing against (general or sector-specific). - Trends: cite at least 3 years of values, not a single snapshot. ## Output Format ### Findings #### [High|Medium|Low] Short Title - **ID**: `BS-NN` - **Citation**: balance sheet line / note, with periods - **Evidence**: computed ratio + threshold + trend - **Implication**: what this means under stress ### Suppressed Items ### Execution Status ``` Filings reviewed: 10-Q (Q3 2025), 10-K (FY2024) for footnotes Filing pre-scan: 9/9 items hit, 2 confirmed as findings Industry norm applied: ``` ### Summary One line: `N High / M Medium / K Low — most material: `. ## No-Finding Case ``` No balance-sheet findings — leverage moderate, liquidity ample, no goodwill concentration. Notable positives: Net Debt / EBITDA = 0.4×; Cash > Total Debt. ``` ## Load References Selectively - `references/balance-sheet-red-flags.md` — load when assessing goodwill concentration, off-balance-sheet items, or pension liabilities; contains the sector-norm leverage table, historical examples of goodwill bombs, and the Commitments-and-Contingencies decoding guide. ## Review Discipline Balance sheet failures are slow until they're sudden. A leveraged company looks fine in a bull market and dies in a recession. Be unforgiving on High thresholds; the orchestrator will weight these heavily in the Bear scenario. ## Source & license This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code. - **Author:** [johnqtcg](https://github.com/johnqtcg) - **Source:** [johnqtcg/awesome-skills](https://github.com/johnqtcg/awesome-skills) - **License:** MIT - **Homepage:** https://johnqtcg.github.io/awesome-skills/ Install and usage instructions live in the source repository linked above. ## Pricing - **Free** — Free ## Security capabilities Automated source analysis of v0.1.0 — what this tool can access: - **Network access:** no - **Filesystem access:** no - **Shell / process execution:** no - **Environment & secrets:** no - **Dynamic code execution:** no *"Yes" means the capability is present in the source — more access means more to trust, not that it is unsafe.* ## Versions - **0.1.0** — security scan: passed — Imported from the upstream source. ## Links - Listing page: https://agentstack.voostack.com/l/skill-johnqtcg-awesome-skills-stock-balance-sheet-review - Seller: https://agentstack.voostack.com/s/johnqtcg - Browse the marketplace: https://agentstack.voostack.com/browse --- Listed on AgentStack — the marketplace for AI agent skills and MCP servers. 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