Surgery Partners, Inc. — Earnings Quality Grade F
SGRY · Healthcare
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 66 days, change -1 days YoY
AR growth 4.0% vs revenue growth 6.2%
Revenue 6.2%, CFFO -8.6%. Cash follows revenue
Expense Quality
Inventory 9.3% vs COGS 7.4%. Normal
CapEx growth -12.9% vs revenue 6.2%. Normal
SG&A/Gross Profit = 15.5%, excellent (<30%)
Gross margin 23.1%, change -0.8pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF $0.2B, FCF/NI = -2.51
Accruals ratio = -4.3%. Low accruals
Cash $0.2B covers only 6% of debt $4.0B
Balance Sheet Health
Goodwill+Intangibles $5.2B = 306% of equity. Over 50%
Debt/EBITDA = 7.1x (>4x). Interest coverage = 1.7x (<2x). Financial stress
Other assets -1.2% vs revenue 6.2%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 2% YoY. Normal
Manipulation Score
M-Score = -2.62 (< -2.22). Unlikely manipulator
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