AAR Corp. — Earnings Quality Grade F
AIR · Industrials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 41 days, change +1 days YoY
AR outpaced revenue for 2 consecutive years
Revenue grew 19.9% but CFFO declined -17.2%
Expense Quality
Inventory 10.4% vs COGS 20.0%. Normal
CapEx growth 16.8% vs revenue 19.9%. Normal
SG&A/Gross Profit = 65.9%. Normal
Gross margin 19.0%, change -0.1pp. Stable
Cash Flow Quality
CFFO/NI = 2.89. Profits backed by cash
FCF < 50% of Net Income for 3 years
Accruals ratio = -0.8%. Low accruals
Cash $0.1B covers only 9% of debt $1.0B
Balance Sheet Health
Goodwill+Intangibles $0.8B = 62% of equity. Over 50%
Debt/EBITDA = 6.2x (>4x). Financial stress
Other assets 2.2% vs revenue 19.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Goodwill+Intangibles change -5% YoY. Normal
Manipulation Score
M-Score = -2.36 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25