Cognizant Technology Solutions — Earnings Quality Grade D
CTSH · Technology
Significant concerns
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 77 days, change +2 days YoY
AR outpaced revenue for 2 consecutive years
Revenue 7.0%, CFFO 35.7%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth -3.0% vs revenue 7.0%. Normal
SG&A/Gross Profit = 45.5%. Normal
Gross margin 33.7%, change -0.6pp. Stable
Cash Flow Quality
CFFO/NI = 1.29. Profits backed by cash
FCF $2.6B, FCF/NI = 1.16
Accruals ratio = -3.2%. Low accruals
Cash $1.9B covers debt $1.2B
Balance Sheet Health
Goodwill+Intangibles $8.5B = 57% of equity. Over 50%
Debt/EBITDA = 0.3x. Healthy
Other assets grew 72.2% vs revenue 7.0%
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -0% YoY. Normal
Manipulation Score
M-Score = -2.50 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08