Forensic Analysis · Industrials / Manufacturing / Defense · as of Aug 10, 2026
Aar Corp (AIR)
A forensic read on Aar Corp built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
C · Mixed — selective
Forensic grade
Safe
Financial health
7.5
Distress distance
Clean
Earnings quality
6
Forensic signals
31.1
P / E (ttm)
11.0%
ROE
$5.8B
Market cap
19.0%
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 (red flags, auditor quality, say on pay, board independence). 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.
Aar Corp earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 7.5, placing it in the Safe zone. 6 forensic signals were flagged in its latest SEC filings, led by share-count dilution.
What the filings flag
+3.0%/yr
FY2023–FY2026
Share-count dilution.Diluted share count changed +9% over the last 3 years to FY2026 (+3.0%/yr). A change of direction: the count shrank over the full period (net -0.8%/yr since FY2012) but has grown across the recent window, so the two figures point opposite ways — read the recent window on totals versus per-share, since the full-period rate no longer describes what the count is doing now. That's ~3.0% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~9%.
0.5% of rev
FY2026
Stock-based comp load.Stock-based compensation ran 0.5% of revenue and 29% of free cash flow in FY2026 — about $0.46 per diluted share. The cost of it is not in the cash flow — no cash left the business — it is in the count: holders gave up about 3.1% of the company a year, and that rate is not falling. That is the figure to weigh, not the share of free cash flow.
0.72×
FY2024–FY2026
Cash conversion.Over FY2024–FY2026, operating cash flow was 0.72× cumulative net income. Cash is lagging reported profit. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.
+18.7%
FY2025→FY2026
Accruals ratio (% of NOA).Net operating assets grew +18.7% relative to their own average in FY2026 — scaled by NOA itself, not total assets (see the Forensic Screens card's differently-scaled Sloan Accrual Ratio for that read). 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 inventory up +21% against +19% in cost of sales and receivables up +9% against revenue +19%. The cash-flow cross-check is more mixed: reported earnings ran in line with operating cash by 4% of net operating assets, diverging from the balance-sheet accrual read.
Key fundamentals
Latest Revenue$3.31B
Revenue Growth YoY+19.0%
Revenue CAGR (3yr)+18.4%
Net Margin5.7%
Free Cash Flow$62.1M
Return on Equity11.0%
Debt / Equity0.52x
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 Aar Corp's actual 10-K/10-Q/8-K filings?
Return on invested capital.Return on invested capital is 7.1% in the latest fiscal year and steady — slightly below its ~9% cost of capital — reinvestment is roughly a wash.
721% of FCF
FY2025
Shareholder returns.Returned $10M to shareholders (buybacks + dividends) in FY2025 — 721% of free cash flow, but 28% of operating cash flow. Returns run ahead of free cash flow because the business is also funding heavy growth capex (usually debt-financed); the payout itself is covered by operating cash — sustainable as long as that spending is genuine expansion, not upkeep.