patterns / inventory_heavy

credit thesis

Inventory heavy

physical stock ≥£500k with cash tightening on stable revenue — working capital is trapped on the shelves; inventory finance or ABL frees it

the signature — what the register must show
staff ≥5
stocks ≥ £500k
cash below the prior year
revenue stable or growing (≥90% of prior, or not filed)
in the service sectors, some disclosed tangible base

Why it matters

Cash is sitting on the shelves: the stock supports revenue but consumes the liquidity. Wholesale, manufacturing and distribution live like this permanently — which is exactly why inventory facilities exist. Service firms are excluded unless they show a tangible base, because their 'stocks' line is normally unbilled work in progress: a law firm's £2.7m of stock is time, not goods, and no inventory lender will touch it. That exclusion costs nothing — it removes 2.5% of the flags and leaves the measured lift unchanged.

The play

Inventory finance, ABL or a working-capital facility sized against the stock; the conversation starts from the stock-turn number.

How it's kept honest

The badge is recomputed nightly across the whole index, and re-evaluated live the moment a company files — so a match is always a statement about the current register, not a stale list. Like every signal the scout raises: a prompt to look closer, never a verdict.