Advance Auto Parts Inc. — Earnings Quality Grade F
AAP · Consumer Cyclical
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 16 days, change -1 days YoY
AR growth -11.3% vs revenue growth -5.4%
Revenue -5.4%, CFFO -154.1%. Cash follows revenue
Expense Quality
Inventory growth 0.9% far exceeds COGS -14.4%, margin rising. Fraud signal
CapEx growth 39.2% is >2x revenue growth -5.4%
SG&A/Gross Profit = 95.7%, exceeds 70%
Gross margin swung +5.9pp (37.5% → 43.4%)
Cash Flow Quality
CFFO/NI = -1.05. Only -105% of profit backed by cash
FCF is negative ($-0.3B)
Accruals ratio = 0.8%. Low accruals
Cash $3.1B covers 60% of debt $5.2B
Balance Sheet Health
Goodwill+Intangibles $1.0B = 45% of equity
Debt/EBITDA = 16.3x (>4x). Interest coverage = 1.2x (<2x). Financial stress
Other assets grew 48.6% vs revenue -5.4%
No write-off data
Acquisition Risk
FCF after acquisitions negative for 2/3 years
Goodwill+Intangibles change -0% YoY. Normal
Manipulation Score
M-Score = -2.67 (< -2.22). Unlikely manipulator
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Beneish M-Score
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Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25