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Variable: {total_liabilities_hvac_industry}
Definition: Total current and long-term liabilities on the balance sheet, including accounts payable, accrued expenses, notes payable, and long-term debt for HVAC contractors.
Value: Client-provided
Top Performers: N/A – Not applicable
Value Tiers: Revenue $250K–$500K: $100K–$250K; $500K–$1M: $200K–$400K; $1M–$2M: $350K–$700K; $2M–$5M: $700K–$1.5M (RMA Statement Studies, BizMiner for NAICS 238220).
Red Flag Trigger: >60% of revenue or >70% of total assets.
Default Value: N/A – Not applicable

Variable: {owner_equity_hvac_industry}
Definition: Owner's equity or net worth on the balance sheet, representing assets minus liabilities for HVAC businesses.
Value: Client-provided
Top Performers: N/A – Not applicable
Value Tiers: Revenue $250K–$500K: $50K–$150K; $500K–$1M: $100K–$300K; $1M–$2M: $250K–$600K; $2M–$5M: $500K–$1.2M (RMA Statement Studies, BizMiner).
Red Flag Trigger: <20% of total assets or negative.
Default Value: N/A – Not applicable

Variable: {gross_profit_margin_percent_hvac_industry}
Definition: (Revenue - COGS)/Revenue * 100, where COGS includes materials, direct labor, and trucks for HVAC service and replacement.
Value: Client-provided
Top Performers: Elite 10-20% achieve 50-60% via 25-35% attach rates, $1M+ revenue/tech, low inventory waste (ServiceTitan 2023, Nexstar surveys).
Value Tiers: N/A – Consistent across sizes.
Red Flag Trigger: <35%.
Default Value: 43%

Variable: {net_profit_margin_percent_hvac_industry}
Definition: Net income after all expenses as percentage of total revenue for HVAC contractors.
Value: Client-provided
Top Performers: Top 20% hit 12-18% with owner zero field hours, overhead <20%, high GP (ServiceTitan 2023, PHCC benchmarks).
Value Tiers: N/A – Consistent, scales with efficiency.
Red Flag Trigger: <4%.
Default Value: 7%

Variable: {ebitda_margin_percent_hvac_industry}
Definition: EBITDA (earnings before interest, taxes, depreciation, amortization) as percentage of revenue in HVAC operations.
Value: Client-provided
Top Performers: Elite achieve 18-25% through scaled ops, low capex, strong cash flow (ServiceTitan, EGIA reports).
Value Tiers: N/A – Consistent across sizes.
Red Flag Trigger: <8%.
Default Value: 12%

Variable: {current_ratio_hvac_industry}
Definition: Current assets divided by current liabilities, measuring short-term liquidity for HVAC firms.
Value: Client-provided
Top Performers: >2.5x with strong A/R collection <45 days, minimal inventory buildup (RMA, BizMiner).
Value Tiers: N/A – Target consistent 1.5-2.5.
Red Flag Trigger: <1.2.
Default Value: 1.8

Variable: {quick_ratio_hvac_industry}
Definition: (Current assets - inventory)/current liabilities, assessing immediate liquidity excluding inventory.
Value: Client-provided
Top Performers: >1.5x via fast A/R turnover, low WIP (RMA Statement Studies).
Value Tiers: N/A – Target 1.0-1.5.
Red Flag Trigger: <0.8.
Default Value: 1.2

Variable: {debt_to_equity_ratio_hvac_industry}
Definition: Total liabilities divided by owner's equity, indicating financial leverage in HVAC businesses.
Value: Client-provided
Top Performers: <0.8 with high retained earnings, minimal debt reliance (RMA, BizMiner).
Value Tiers: N/A – Target 0.5-1.5.
Red Flag Trigger: >2.5.
Default Value: 1.2

Variable: {return_on_assets_percent_hvac_industry}
Definition: Net income / total assets * 100, measuring asset efficiency in HVAC operations.
Value: Client-provided
Top Performers: 12-18% with lean assets, high turnover (ServiceTitan, RMA).
Value Tiers: N/A – Consistent 6-12%.
Red Flag Trigger: <5%.
Default Value: 8%

Variable: {return_on_equity_percent_hvac_industry}
Definition: Net income / owner's equity * 100, evaluating returns to equity holders in HVAC.
Value: Client-provided
Top Performers: 20-30% via compounding profits, low leverage (RMA, Nexstar).
Value Tiers: N/A – Target 15-25%.
Red Flag Trigger: <10%.
Default Value: 16%