RiskSGA Trend#109
Capital Expenditure to Operating Cash Flow expresses the financial stress or solvency profile of the business.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Slope of SGA/Revenue ratio over 5 years
Description
Measures whether the company is becoming more or less efficient at converting sales effort into revenue. A negative trend (declining SGA/Revenue) indicates improving operating leverage, meaning each dollar of overhead supports more revenue over time.
Interpretation
Below 0 (negative slope) is ideal, indicating improving efficiency. The company is growing revenue faster than overhead costs. A positive trend means SGA costs are rising faster than revenue, which may indicate loss of competitive advantage or sales channel inefficiency.
Related metrics: Beta (Market Sensitivity), 52-Week Price Volatility. (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Capital Expenditure to Operating Cash Flow (CapEx/OCF)- Primary source filings used to calculate Capital Expenditure to Operating Cash Flow (CapEx/OCF).
FAQ
How is Capital Expenditure to Operating Cash Flow calculated?+
Capital Expenditure to Operating Cash Flow uses the formula: Slope of SGA/Revenue ratio over 5 years. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR balance-sheet + cash-flow statements.
What is a good Capital Expenditure to Operating Cash Flow value by sector?+
There is no single 'good' value for Capital Expenditure to Operating Cash Flow — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Capital Expenditure to Operating Cash Flow on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Capital Expenditure to Operating Cash Flow?+
Howard Marks, Seth Klarman, Bill Ackman in distressed scenarios cite Capital Expenditure to Operating Cash Flow as a key input to to flag solvency stress and avoid permanent capital loss. The academic anchor is Altman (1968) Z-Score and Piotroski (2000) F-Score. ValueMarkers weights this within the Risk pillar of the VMCI score (8% of total).
What are the limitations of Capital Expenditure to Operating Cash Flow?+
Capital Expenditure to Operating Cash Flow can mislead in asset-heavy industries where leverage ratios understate true risk. Pair Capital Expenditure to Operating Cash Flow with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Capital Expenditure to Operating Cash Flow data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Capital Expenditure to Operating Cash Flow data, sector percentiles, and the VMCI composite score that integrates Capital Expenditure to Operating Cash Flow with 119 other indicators across 100,000+ stocks. The free /screener exposes Capital Expenditure to Operating Cash Flow as a filterable column.
Related Risk Indicators
Beta (Market Sensitivity)GM Trend
Beta is the metric used to the financial stress or solvency profile of the business.
52-Week Price VolatilityNM Trend
52-Week Price Volatility measures the financial stress or solvency profile of the business.
Maximum Drawdown 1Y (Max Drawdown)ROIC Min 5Y
Maximum Drawdown 1Y expresses the financial stress or solvency profile of the business.
Free Cash Flow to Enterprise (FCF to Firm)EQ
Free Cash Flow to Enterprise captures the financial stress or solvency profile of the business.
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