Forensic Analysis · Retail / Consumer Discretionary · as of Nov 9, 2026
Advance Auto Parts Inc (AAP)
A forensic read on Advance Auto Parts Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
F · Poor — capital at risk
Forensic grade
Safe
Financial health
3.1
Distress distance
Clean
Earnings quality
4
Forensic signals
2.0%
ROE
-5.4%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Advance Auto Parts Inc earns an F (Poor — capital at risk) forensic quality grade, and its balance-sheet distress test reads 3.1, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-0.8%
FY2025
Return on invested capital.Return on invested capital is -0.8% in the latest fiscal year, against 0.5% in FY2023, having run between -10.5% and 0.5% across FY2023–FY2025 with no direction held. After-tax operating profit was $31M in FY2023 and ($34M) in FY2025, with operating income at 0.4% of revenue in FY2023, -7.8% in FY2024 and -0.5% in FY2025. The capital base behind it came down -32% across FY2023–FY2025, from $6.5B to $4.4B, so this return is struck on a smaller base than it started on. FY2023's operating profit carried a $16M restructuring charge that took about 0.2 points off that year's return, and FY2025's carried a $204M restructuring charge and a $32M asset write-down that took about 4.2 points off the latest; so, net of each other, the two charges take about 4.0 points off the -1.3-point change across FY2023–FY2025. FY2024's operating profit carried a $309M restructuring charge and a $144M asset write-down that alone took about 6.7 points off that year's return; FY2024 sits between the two ends of FY2023–FY2025, so the charge shapes the path between them without moving the change across it. A non-cash write-down lowers the reported return in the year it lands.
FCF ($298M)
FY2025
Shareholder returns.Returned $60M to shareholders (buybacks + dividends) in FY2025, but free cash flow was ($298M) after capex — there was no free cash flow to fund the payout from at all, and operating cash flow itself was negative or zero that year too. The entire return is coming from debt or cash reserves, not cash the business itself generated — a harder case than returns merely running ahead of free cash flow, since here there was none to run ahead of.
+17.3%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +17.3% relative to their own average in FY2025 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by payables paid down 13% against -14% in cost of sales. A cash-flow measure on the same base disagrees: reported earnings ran in line with operating cash by 4% of net operating assets, against an accruals ratio of 17.3%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
272d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 241 to 272 FY2024→FY2025 (against cost of goods sold; inventory +1% vs -14% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.
Key fundamentals
Latest Revenue$8.60B
Revenue Growth YoY-5.4%
Revenue CAGR (2yr)-3.4%
Net Margin0.5%
Free Cash Flow-$298.0M
Return on Equity2.0%
Debt / Equity0.81x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Advance Auto Parts Inc's actual 10-K/10-Q/8-K filings?