Arq, Inc. — Earnings Quality Grade F
ARQ · Industrials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 45 days, change +1 days YoY
AR outpaced revenue for 2 consecutive years
Revenue grew 10.4% but CFFO declined -126.1%
Small-cap context: Small-cap revenue/CFFO ratio is sensitive to growth-stage working-capital draws.
Expense Quality
Inventory -17.7% vs COGS 24.9%. Normal
CapEx growth -89.9% vs revenue 10.4%. Normal
SG&A/Gross Profit = 67.3%. Normal
Gross margin swung -8.3pp (36.2% → 27.9%)
Cash Flow Quality
CFFO/NI = 0.05. Below 1.0
FCF is negative ($-0.0B)
Accruals ratio = -21.6%. Low accruals
Cash $0.0B covers only 18% of debt $0.0B
Balance Sheet Health
No goodwill. Clean balance sheet
Interest coverage = -3.3x (<2x). Financial stress
Other assets -0.5% vs revenue 10.4%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Small-cap context: A single acquisition on a small balance sheet can trip serial-acquirer logic.
No goodwill
Manipulation Score
M-Score = -3.28 (< -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