Forensic Analysis · Technology / Software · as of Aug 7, 2026

Cadence Design Systems Inc (CDNS)

A forensic read on Cadence Design Systems Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

D · Weak — demands caution

Forensic grade

Safe

Financial health

17.8

Distress distance

Clean

Earnings quality

Forensic signals

69.4

P / E (ttm)

20.3%

ROE

$93.4B

Market cap

14.1%

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.

Cadence Design Systems Inc earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 17.8, placing it in the Safe zone. 2 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of noa).

What the filings flag

+19.7%

FY2024→FY2025

Accruals ratio (% of NOA). Net operating assets grew +19.7% relative to their own average in FY2025 — 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 receivables up +39% against revenue +14% and inventory up +18% on the year. The cash-flow cross-check is more mixed: reported earnings ran behind operating cash by 28% of net operating assets, diverging from the balance-sheet accrual read.

-0.2%/yr

FY2022–FY2025

Share count. Diluted share count changed -1% over the last 3 years to FY2025 (-0.2%/yr). Roughly flat — buybacks ($925M) are about offsetting stock comp ($455M), not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.

Key fundamentals

Latest Revenue$5.30B

Revenue Growth YoY+14.1%

Revenue CAGR (3yr)+14.1%

Net Margin20.9%

Free Cash Flow$1.59B

Return on Equity20.3%

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Data from SEC EDGAR public filings · metrics as of Aug 7, 2026. Forensic signals flag probability, not certainty.