Western Digital Corporation — Earnings Quality Grade F
WDC · Technology
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 57 days, change -14 days YoY
AR growth 20.7% vs revenue growth 50.7%
Revenue 50.7%, CFFO 675.2%. Cash follows revenue
Expense Quality
Inventory -6.9% vs COGS 28.3%. Normal
CapEx growth -15.4% vs revenue 50.7%. Normal
SG&A/Gross Profit = 15.4%, excellent (<30%)
Gross margin swung +10.7pp (28.1% → 38.8%)
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
FCF $1.3B, FCF/NI = 0.69
Accruals ratio = 1.2%. Low accruals
Cash $2.1B covers only 45% of debt $4.7B
Balance Sheet Health
Goodwill+Intangibles $4.3B = 78% of equity. Over 50%
Debt/EBITDA = 2.4x. Healthy
Other assets -94.8% vs revenue 50.7%. Normal
Write-offs normal
Acquisition Risk
FCF after acquisitions negative for 2/3 years
Goodwill+Intangibles change -2% YoY. Normal
Manipulation Score
M-Score = -2.36 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-10