Epsilon Energy Ltd. — Earnings Quality Grade F
EPSN · Energy
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO surged by 19 days (67 → 86)
Small-cap context: DSO swings on a small revenue base are more often quarterly customer-mix effects than red flags.
AR growth 109.3% exceeds revenue growth 63.7%
Revenue 63.7%, CFFO 22.5%. Cash follows revenue
Expense Quality
No material inventory
CapEx growth -57.9% vs revenue 63.7%. Normal
SG&A/Gross Profit = 36.3%. Normal
Gross margin swung +10.1pp (37.5% → 47.6%)
Cash Flow Quality
CFFO/NI = -3.56. Below 1.0
FCF < 50% of Net Income for 2 years
Accruals ratio = -11.6%. Low accruals
Cash $0.0B covers only 18% of debt $0.1B
Balance Sheet Health
No goodwill. Clean balance sheet
Debt/EBITDA = 6.9x (>4x). Financial stress
Other assets 17.7% vs revenue 63.7%. 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 = -3.81 (< -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