Forensic Analysis · Industrials / Manufacturing / Defense · as of Aug 9, 2026
Lennox International Inc (LII)
A forensic read on Lennox International Inc 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
12.2
Distress distance
Clean
Earnings quality
4
Forensic signals
19.1
P / E (ttm)
69.3%
ROE
$15.2B
Market cap
1.25%
Dividend yield
-2.7%
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.
Lennox International Inc earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 12.2, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of noa).
What the filings flag
+29.9%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +29.9% 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 sharply — a large slice of profit sits in operating assets, not cash; Richardson/Sloan link high accruals to weaker future returns as they reverse. The build is led by inventory up +35% against -3% in cost of sales and payables paid down 11% against -3% in cost of sales. This is the fifth straight fiscal year of building accruals — an even longer streak than the 3-year mark that already signals a materially stronger tell. The cash-flow cross-check is more mixed: reported earnings ran in line with operating cash by 2% of net operating assets, diverging from the balance-sheet accrual read.
106d
FY2024→FY2025
Inventory days.Days inventory outstanding moved from 87 to 106 FY2024→FY2025 (against cost of goods sold; inventory +35% vs -3% in cost of sales). Inventory is outrunning what's being sold — a flag for softening demand or obsolescence risk ahead.
-0.4%/yr
FY2022–FY2025
Share count.Diluted share count changed -1% over the last 3 years to FY2025 (-0.4%/yr). Roughly flat — buybacks ($482M) are about offsetting stock comp ($29M), not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.
103% of FCF
FY2025
Shareholder returns.Returned $655M to shareholders (buybacks + dividends) in FY2025 — 103% of free cash flow. Right at the limit of what free cash flow covers — little room before it's funded by debt or the balance sheet. That ratio has actually been EASING, not tightening further — down from ~220% of free cash flow a few years back. Counting the $29M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 107%.
Key fundamentals
Latest Revenue$5.20B
Revenue Growth YoY-2.7%
Revenue CAGR (3yr)+3.3%
Net Margin15.5%
Free Cash Flow$638.8M
Return on Equity69.3%
Debt / Equity1.00x
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 Lennox International Inc's actual 10-K/10-Q/8-K filings?