Frequency Electronics, Inc. — Earnings Quality Grade F
FEIM · Technology
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 31 days, change +0 days YoY
AR growth 28.2% vs revenue growth 26.3%
Revenue grew 26.3% but CFFO declined -116.4%
Small-cap context: Small-cap revenue/CFFO ratio is sensitive to growth-stage working-capital draws.
Expense Quality
Inventory 0.2% vs COGS 8.2%. Normal
CapEx growth 21.2% vs revenue 26.3%. Normal
SG&A/Gross Profit = 40.8%. Normal
Gross margin rose +9.5pp while AR increased and AP decreased. Fraud pattern
Cash Flow Quality
CFFO/NI = -0.06. Only -6% of profit backed by cash
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF is negative ($-0.0B)
Accruals ratio = 26.8%. Exceeds 10%
Cash $0.0B covers 54% of debt $0.0B
Balance Sheet Health
Goodwill+Intangibles $0.0B = 1% of equity. Manageable
Debt/EBITDA = 0.6x. Healthy
Other assets 9.0% vs revenue 26.3%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 0% YoY. Normal
Manipulation Score
M-Score = -0.63 (> -1.78). LIKELY MANIPULATOR
Small-cap context: Beneish M-Score was calibrated on large-caps; small-cap DSO/inventory volatility mechanically inflates it.
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25