C

Innospec Inc. — Earnings Quality Grade C

IOSP · Basic Materials

Some red flags

Revenue
$1.8B
2025
Net Income
$117M
2025
Gross Margin
27.7%
Free Cash Flow
$63M
01

Screening Summary

13
Passed
3
Watch
1
Failed
-2.46
M-Score

Management Signals

No recent CEO, CFO, board, or accounting leadership signals found in SEC 8-K filings.
02

Financial Trends

Revenue & Net Income ($B)

Margins (%)

03

18-Point Screening

01

Revenue Quality

A1DSO Change

DSO 70 days, change +3 days YoY

A2AR vs Revenue Growth

AR outpaced revenue for 2 consecutive years

A3Revenue vs CFFO

Revenue -3.7%, CFFO -25.0%. Cash follows revenue

02

Expense Quality

B1Inventory vs COGS

Inventory 9.4% vs COGS -1.3%. Normal

!
B2CapEx vs Revenue

CapEx growth 21.2% is >2x revenue growth -3.7%

B3SG&A Ratio

SG&A/Gross Profit = 57.9%. Normal

B4Gross Margin

Gross margin 27.7%, change -1.7pp. Stable

03

Cash Flow Quality

C1CFFO vs Net Income

CFFO/NI = 1.19. Profits backed by cash

C2Free Cash Flow

FCF $0.1B, FCF/NI = 0.54

C3Accruals Ratio

Accruals ratio = -1.2%. Low accruals

C4Cash vs Debt

Cash $0.3B covers debt $0.1B

04

Balance Sheet Health

!
D1Goodwill + Intangibles

Goodwill+Intangibles $0.5B = 35% of equity

D2Leverage

Debt/EBITDA = 0.3x. Healthy

!
D3Soft Asset Growth

Other assets grew 123.1% vs revenue -3.7%

D4Asset Impairment

No write-off data

05

Acquisition Risk

E1Serial Acquirer FCF

FCF after acquisitions positive

E2Goodwill Surge

Goodwill+Intangibles change 4% YoY. Normal

06

Manipulation Score

F1Beneish M-Score

M-Score = -2.46 (< -2.22). Unlikely manipulator

Portfolio monitoring

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04

Beneish M-Score

Manipulation Probability-2.46
-4.0 Clean-2.22 Grey-1.78 Danger0
1.04
DSRI
AR growing faster than revenue?
1.062
GMI
Gross margin declining?
0.999
AQI
Asset quality deteriorating?
0.963
SGI
Revenue growth rate
1.066
DEPI
Depreciation slowing?
0.969
SGAI
SG&A ratio changing?
-0.0118
TATA
Accruals level
0.918
LVGI
Leverage increasing?
05

Altman Z-Score

7.62
Safe Zone
0 Distress1.102.605.0+ Safe
0.3517
Liquidity
0.5999
Cumulative profit
0.0853
Operating efficiency
2.6549
Leverage

Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25