Insteel Industries, Inc. — Earnings Quality Grade F
IIIN · Industrials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 44 days, change +4 days YoY
AR outpaced revenue for 2 consecutive years
Revenue grew 22.4% but CFFO declined -53.3%
Small-cap context: Small-cap revenue/CFFO ratio is sensitive to growth-stage working-capital draws.
Expense Quality
Inventory growth 55.1% far exceeds COGS 15.6%, margin rising. Fraud signal
Small-cap context: Inventory ratios on a small base are noisy; a single product launch can move them sharply.
CapEx growth -57.1% vs revenue 22.4%. Normal
SG&A/Gross Profit = 41.7%. Normal
Gross margin swung +5.0pp (9.4% → 14.4%)
Cash Flow Quality
CFFO/NI = 0.66. Below 1.0
FCF $0.0B, FCF/NI = 0.46
Accruals ratio = 3.0%. Low accruals
Cash $0.0B covers debt $0.0B
Balance Sheet Health
Goodwill+Intangibles $0.1B = 15% of equity. Manageable
Debt/EBITDA = 0.1x. Healthy
Other assets 6.9% vs revenue 22.4%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles surged 260% YoY
Manipulation Score
M-Score = -1.86 (grey zone)
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