Executive overview

The SCO read-only thesis, pointed at the finance function: P&L, margin, cash, working capital, and the scenarios beneath the plan - observed across the systems of record.

What this is. A preview of a planned domain, not a live product. Financial Intelligence is designed on the shared substrate - it would read the ERP general ledger, AP / AR, FP&A, and billing read-only, populate the shared finance_* collections, and participate in the Record-to-Report and Procure-to-Pay workflows. Every figure is synthetic; projections carry no provenance hash.

$450M

Revenue (TTM)

+6.4% YoY

31.1%

Gross margin

+0.8 pts YoY

14.0%

EBITDA margin

+0.5 pts YoY

$48M

Operating cash flow

TTM

$62M

Cash on hand

+$10M QoQ

70 days

Cash conversion cycle

+4 days QoQ

$31M

Free cash flow

TTM

6.2

Inventory turns

+0.4 YoY

Revenue trajectory & projection synthetic

Quarterly revenue ($M), trailing 8 quarters with a 4-quarter projection and confidence band.

Actual revenueProjectionConfidence band

Signals worth attention

Cash conversion cycle up 4 days - driven by slower distributor receivables.

$3.1M excess & obsolete inventory weighing on working capital at OSK-03.

Gross margin +0.8 pts YoY - price realization outpacing input-cost inflation.

Synthetic preview. In production, derived read-only from the GL, sub-ledgers, and FP&A with SHA-256-anchored lineage as in SCO.

Profit & loss

The income statement, trailing twelve months, against budget - sourced read-only from the general ledger.

P&L summary (TTM, $M) read-only

Line	Actual	% rev	Budget	Var
Revenue	450.0	100.0%	446.0	+4.0
Cost of goods sold	(310.0)	68.9%	(309.0)	-1.0
Gross profit	140.0	31.1%	137.0	+3.0
SG&A	(63.0)	14.0%	(62.0)	-1.0
R&D	(14.0)	3.1%	(14.5)	+0.5
EBITDA	63.0	14.0%	60.5	+2.5
Depreciation & amort.	(18.0)	4.0%	(18.0)	0.0
EBIT	45.0	10.0%	42.5	+2.5
Interest	(6.0)	1.3%	(6.0)	0.0
Tax	(9.0)	2.0%	(8.4)	-0.6
Net income	30.0	6.7%	28.1	+1.9

Operating leverage

Revenue growth (YoY)+6.4%

EBITDA growth (YoY)+10.5%

Incremental margin23%

Opex as % rev17.1%

Highlights

EBITDA $2.5M ahead of budget on stronger gross margin and disciplined R&D.

SG&A $1.0M over budget - logistics and headcount the main drivers.

Synthetic. Reads the GL and budget read-only (e.g., SAP / Oracle / NetSuite + FP&A); never posts entries.

Margin analysis

What moved gross margin, and where it concentrates - price, volume, mix, and input cost.

31.1%

Gross margin

+0.8 pts

YoY change

$4M

Cost-inflation drag

$11M

Price contribution

Gross-profit bridge (YoY, $M) synthetic

Prior-year gross profit to current, decomposed into price, volume, mix, and cost.

Gross margin by segment

Aftermarket41%

Direct / enterprise33%

OEM27%

Distributor21%

Margin by product family

Family	GM%	Trend
Hydraulics	36%	up
Bearings	34%	up
Castings	29%	flat
Fasteners	24%	flat
Electrical	19%	down

Synthetic. Bridge and segment margins computed from GL + cost data read-only; decomposition is a model, not a posted figure.

Cash & liquidity

Cash position and the flows behind it - operating, investing, and financing - with a forward view on liquidity.

$62M

Cash on hand

$48M

Operating cash flow

$31M

Free cash flow

$40M

Undrawn revolver

Cash balance trend synthetic

End-of-quarter cash ($M), trailing 8 quarters.

Cash flow statement (TTM, $M)

Component	Amount
Net income	30.0
D&A	+18.0
Working-capital change	-2.0
Other operating	+2.0
Operating cash flow	48.0
Capex	(17.0)
Free cash flow	31.0
Financing	(21.0)
Net change in cash	+10.0

Liquidity

Cash + undrawn revolver$102M

Net debt$58M

Net debt / EBITDA0.9×

Interest coverage7.5×

Leverage at 0.9x leaves ample room for capex or buy-and-build.

Synthetic. Reads cash, debt, and sub-ledgers read-only; AssetShop never moves money.

Working capital

The cash tied up in operations - receivables, payables, and inventory - and the cycle that connects them.

70 days

Cash conversion cycle

52 days

DSO

+3 QoQ

41 days

DPO

59 days

DIO

AR aging read-only

Current$41M

1-30 days$14M

31-60 days$7M

60+ days$2M

AP aging

Current$26M

1-30 days$7M

31-60 days$2M

Working-capital opportunity

AR ($64M total)DSO 52 → 47 = ~$6M

Inventory ($50M total)turns 6.2 → 7.5 = ~$5M

AP ($35M total)DPO 41 → 46 = ~$4M

Closing the gaps would free roughly $15M of cash without touching the P&L.

Synthetic. Ties to the Demand inventory view; AR/AP read-only from sub-ledgers; targets computed, not read.

Cost & spend

Where the money goes - operating cost by category and the vendor spend behind it.

$86M

Total opex (TTM)

17.1%

Opex % revenue

$8M

Logistics cost

+12% YoY

38%

Spend in top 10 vendors

Operating cost by category read-only

Compensation$44M

Logistics & freight$16M

Facilities$11M

IT & systems$9M

Professional svcs$6M

Logistics up 12% YoY - concentrated in West-region LTL, consistent with the distribution service gap.

Top spend categories

Category	Spend	YoY
Raw materials (steel)	$118M	+9%
Components	$74M	+4%
Freight & logistics	$16M	+12%
MRO & indirect	$12M	+2%
Energy	$9M	+7%

Spend concentration

Active vendors1,240

Top 10 vendors38% of spend

Single-source spend$31M (at risk)

Consolidation + renegotiation on indirect spend is a near-term margin lever.

Synthetic. Reads AP + procurement read-only; ties to the SCO procurement domain. Advisory only.

Profitability

Gross profit and contribution by segment and customer - where the company actually makes money.

Gross profit by segment synthetic

Contribution by customer tier

Tier	Revenue	Contribution	CM%
Strategic (A)	$198M	$71M	36%
Core (B)	$144M	$45M	31%
Transactional (C)	$81M	$19M	23%
Long-tail (D)	$27M	$5M	18%

Profit concentration & signals

Top 20 customers54% of gross profit

Loss-making accounts11 (-$1.2M)

Sub-target-margin revenue$62M

11 accounts are gross-margin negative - a repricing or terms review candidate.

Synthetic. Profitability allocated read-only from GL + order + cost data; computed, not a verdict.

Budget & variance

Actual against plan, line by line, with the drivers behind each variance.

Actual vs budget - revenue synthetic

Quarterly ($M), trailing 8 quarters.

ActualBudget

Variance by line (TTM, $M)

Line	Actual	Budget	Var	Driver
Revenue	450.0	446.0	+4.0	Price & aftermarket
Gross profit	140.0	137.0	+3.0	Margin mix
SG&A	63.0	62.0	-1.0	Logistics, headcount
EBITDA	63.0	60.5	+2.5	Gross margin
Net income	30.0	28.1	+1.9	Flow-through

Synthetic. Reads actuals from the GL and plan from FP&A read-only; variance attribution is a model.

Scenario & forecast

Driver-based EBITDA under base, upside, and downside - to stress the plan before committing it.

$73M

Base (FY27 EBITDA)

$86M

Upside

$59M

Downside

EBITDA scenarios synthetic

Projected EBITDA ($M) over the next 6 quarters.

BaseUpsideDownside

Scenario drivers

Driver	Base	Up	Down
Revenue growth	+6%	+11%	+1%
Gross margin	31%	33%	29%
Input inflation	+4%	+2%	+8%
Opex growth	+4%	+3%	+6%

Sensitivity (EBITDA)

+/- 1 pt gross margin+/- $4.5M

+/- 100 bps input cost-/+ $3.1M

+/- $10M revenue+/- $3.1M

+/- 5 days DSO+/- $6M cash

Calibration. Scenarios are derived from observed drivers and carry no provenance hash - they are decision support, not committed forecasts. The same calibration applied to projections across the SCO platform.

Signals & opportunities

Quantified, read-only signals derived from the GL, AP, AR, and FP&A data on the shared substrate. AssetShop surfaces what the numbers show - it never posts entries, moves cash, or acts on a signal. Magnitudes are observed where the data supports it and modeled where noted; figures are synthetic (Meridian Industrials).

10

Open signals

~$14M

Quantified exposure

2

High severity

~$9M

Est. addressable

Detected signals synthetic

Each signal is an observation with a source lineage; confidence reflects how directly the data supports it.

Signal	Domain	Severity	Magnitude	Conf.	Source
Gross-margin erosion - Electrical family	Margin	high	-$3.2M r/r	high	GL + cost
Supplier concentration - top vendor	Procurement	high	34% spend	med	AP + master
DSO creep - enterprise segment	Working capital	medium	+4.2 days / $5.1M	med	AR + GL
SG&A over budget - logistics & headcount	Spend	medium	+$1.0M vs bgt	high	FP&A + GL
Off-contract (maverick) spend	Procurement	medium	$0.9M	high	AP + contracts
Premium / expedite freight	Cost	medium	$0.6M premium	high	AP + logistics
FX exposure - unhedged EUR payables	Treasury	medium	$0.6M	med	AP + GL
Cash-conversion-cycle drift	Working capital	medium	+6 days	med	AR/AP/inv
Inventory carrying drift	Working capital	low	+$0.4M	med	inv + GL
Capex pacing below plan	Capital	low	-$2.0M ytd	low	GL + FP&A

Opportunities the signals point to

What the observation suggests. AssetShop quantifies; your team decides and acts in the source systems.

$5.1M

Working-capital release if DSO on the enterprise segment normalizes to the prior-year run-rate.

$1.8M

FX program on recurring EUR payables - signal is unhedged exposure across two suppliers.

$1.2M

Freight lane consolidation - expedite premium concentrates on three lanes out of DET-01.

$0.9M

Off-contract capture - maverick spend in two indirect categories with active contracts.

How to read this

High signals are concentrated, well-evidenced, and material - margin erosion and vendor concentration here.

Confidence separates observed facts (off-contract spend, freight premium) from modeled estimates (CCC drift).

Every figure traces to a read-only source. Nothing here is posted back to the GL or any system.

Synthetic. Signals are computed from read-only GL/AP/AR/FP&A data; magnitudes labeled "modeled" are estimates, not posted figures. This is operational signal, not financial advice, and AssetShop never writes back to source systems.

Integrations & data

What would power Financial Intelligence - the read-only sources, the shared collections, and the honest build status.

Finance connectors

Read-only; conformance reported honestly (checks passed / total). Planned - not yet built.

Source	System family	Access	Conformance
SAP S/4HANA (GL)	ERP general ledger	read-only	0 / 12 (planned)
Oracle / NetSuite	ERP / sub-ledgers	read-only	0 / 12 (planned)
AP / AR sub-ledgers	Payables / receivables	read-only	0 / 12 (planned)
Anaplan / Pigment	FP&A / planning	read-only	0 / 12 (planned)
Stripe / Zuora	Billing	read-only	0 / 12 (planned)

Shared collections (read-only)

finance_gl_accountsledger

finance_journal_entriesP&L

finance_ap / finance_arworking capital

finance_budgets / _forecastsvariance

shared_purchase_ordersspend

Workflow & posture

Finance joins the Record-to-Report and Procure-to-Pay contracts.

Procure→Receive→Invoice→GL→Report

Write pathaudit / approval only - OFF

GL postingsnever - advisory only

LineageSHA-256 anchored

Status. Finance connectors are planned, not built - scaffolds would report 0 / 12 until wired and conformed. The shared substrate (schema, SDK, event bus, control plane) is the reason adding this domain is mostly connectors + analytics + views, not new foundation. AssetShop observes and advises; it never posts to the ledger or moves money.

GL line detail

Cost-center-level actuals against budget for the current period - the granular ledger behind the P&L.

$112.0M

Actual revenue

$110.0M

Budget

+$2.0M

Variance

9

Cost centers

Detail records synthetic

Variance is actual minus budget; negatives are over-budget. Use Export above to download exactly these rows as CSV.

Account	Cost center	Type	Actual	Budget	Variance
40000 Revenue	CC-100 Sales	revenue	112000000	110000000	+2000000
50000 COGS	CC-200 Ops	cost	77000000	76000000	-1000000
60100 SG&A Logistics	CC-310 Logistics	opex	9800000	9200000	-600000
60200 SG&A Headcount	CC-320 G&A	opex	14200000	13800000	-400000
61000 Marketing	CC-400 Mktg	opex	6100000	6000000	-100000
62000 R&D	CC-500 R&D	opex	8400000	8600000	+200000
70000 Depreciation	CC-200 Ops	other	3200000	3200000	0
80000 Interest	CC-900 Treasury	other	1400000	1400000	0
90000 Tax	CC-900 Treasury	other	4900000	4800000	-100000

Synthetic (GL + FP&A). Read-only detail; AssetShop never writes back to source systems. Figures illustrate Meridian Industrials.