Lennox International, Inc. — Earnings Quality Grade F
LII · Industrials
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 41 days, change -5 days YoY
AR growth -12.4% vs revenue growth -2.7%
Revenue -2.7%, CFFO -19.9%. Cash follows revenue
Expense Quality
Inventory growth 35.1% exceeds COGS -2.9%
CapEx growth -27.4% vs revenue -2.7%. Normal
SG&A/Gross Profit = 39.3%. Normal
Gross margin 33.4%, change +0.1pp. Stable
Cash Flow Quality
CFFO/NI = 0.94. Profits backed by cash
FCF $0.6B, FCF/NI = 0.79
Accruals ratio = 1.2%. Low accruals
Cash $0.0B covers only 2% of debt $1.8B
Balance Sheet Health
Goodwill+Intangibles $0.8B = 66% of equity. Over 50%
Debt/EBITDA = 1.5x. Healthy
Other assets grew 26.1% vs revenue -2.7%
Write-offs normal
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles surged 191% YoY
Manipulation Score
M-Score = -2.21 (grey zone)
Portfolio monitoring
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Beneish M-Score
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Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25