GTESI (General Theory of Evolutionary Systems & Information) is a diagnostic lens for understanding how companies persist, adapt, or collapse. It’s not about replacing financial analysis — it’s about explaining why it sometimes fails. This guide will walk you through how to extract GTESI signals from a company’s 10-K, identify symbolic and thermodynamic risk patterns, and generate a GTESI Risk Card.
I. GTESI’s Four Key Risk Dimensions in 10-Ks
| Risk Dimension | What It Measures | Where to Look in the 10-K |
| IPR: Inverse Persistence Ratio | Symbolic value vs operational memory | Market cap vs. cash flow; asset write-downs; goodwill impairments |
| SCD: Symbolic Compression Divergence | Misalignment between story and system | “Letter to Shareholders,” Strategy Section, MD&A vs. Results |
| TRFI: Trust Ritual Failure Index | Breakdown in trust maintenance rituals | Auditor statements, delays, restatements, leadership turnover |
| EED: Entropy Export Deficit | Failure to convert motion into persistence | Capex vs. scale, R&D spend vs. new revenue, customer churn |
II. Step-by-Step: Reading a 10-K with GTESI
1. Start with the Shareholder Letter or Overview
- ✅ What’s being promised?
- 🚨 Does the language feel inflated or vague?
- 🔍 Compare vision to operational results later in the document.
GTESI Tip: High SCD often shows up here — lofty language that later gets walked back in footnotes.
2. Analyze the MD&A (Management Discussion & Analysis)
- Compare year-over-year performance to the strategic language.
- Look for gaps between stated priorities and executed projects.
Red Flag for IPR: Narrative stability with declining revenue, or resilience rhetoric paired with margin compression.
3. Audit Section and Risk Factors
- Note any material weaknesses, litigation, going-concern notes.
- Look for shifting risk language year over year — ritual inconsistency.
TRFI Risk: If the filing cadence has changed, leadership has turned over rapidly, or footnotes get longer but less clear.
4. Balance Sheet and Cash Flow
- Check for burn rate, capital raises, asset divestitures, goodwill write-offs.
High EED Pattern: R&D or expansion spend without revenue persistence.
III. Build Your GTESI Risk Card
A simple way to compress your analysis. Example:
| Indicator | Score | Notes |
| IPR | 🟠 Moderate | Valuation flat, but fundamentals slipping. |
| SCD | 🔴 High | Strategy and results wildly misaligned. |
| TRFI | 🟠 Rising | Audit flags + erratic leadership. |
| EED | 🔴 Widening | Tech spend rising, customer growth flat. |
IV. From Filing to Diagnosis
Add a one-line GTESI diagnosis:
“This is a symbolic system with rising compression divergence and fraying ritual trust — persistence risk is medium-high unless narrative recompression or entropy export improves.”
And a Persistence Path:
“Re-center strategy on memory-bearing metrics, compress a story that reflects real throughput, and stabilize symbolic rituals.”
V. What GTESI Can See That Numbers Can’t
| Traditional Lens | GTESI Adds |
| Revenue Trends | Motion-to-memory balance |
| Capex vs EBITDA | Entropy bottleneck clarity |
| Market Sentiment | Symbolic coherence & ritual health |
| Risk Disclosures | Compression drift over time |
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