Friedman Industries Inc. — Earnings Quality Grade F
FRD · Basic Materials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 39 days, change +6 days YoY
AR outpaced revenue for 2 consecutive years
Revenue -13.9%, CFFO -188.6%. Cash follows revenue
Expense Quality
Inventory -1.8% vs COGS -10.1%. Normal
CapEx growth -13.6% vs revenue -13.9%. Normal
SG&A/Gross Profit = 35.6%. Normal
Gross margin 10.2%, change -3.8pp. Stable
Cash Flow Quality
CFFO/NI = -0.72. Only -72% of profit backed by cash
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF < 50% of Net Income for 2 years
Accruals ratio = 4.6%. Low accruals
Cash $0.0B covers only 7% of debt $0.1B
Balance Sheet Health
No goodwill. Clean balance sheet
Interest coverage = 0.9x (<2x). Financial stress
Other assets grew 254.8% vs revenue -13.9%
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 = -0.96 (> -1.78). LIKELY MANIPULATOR
Small-cap context: Beneish M-Score was calibrated on large-caps; small-cap DSO/inventory volatility mechanically inflates it.
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