Forensic Analysis · Retail / Consumer Discretionary · as of Nov 9, 2026
Williams Sonoma Inc (WSM)
A forensic read on Williams Sonoma Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
B · Sound & dependable
Forensic grade
Safe
Financial health
4.2
Distress distance
Clean
Earnings quality
3
Forensic signals
51.5%
ROE
1.2%
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.
Williams Sonoma Inc earns a B (Sound & dependable) forensic quality grade, and its balance-sheet distress test reads 4.2, placing it in the Safe zone. 3 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of NOA).
What the filings flag
+13.4%
FY2025→FY2026
Accruals ratio (% of NOA).Net operating assets grew +13.4% relative to their own average in FY2026 — 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. Net operating assets also rose $138,000 through acquisitions (increase in goodwill and intangibles); that purchase is investing and is excluded from this ratio. The build is led by inventory up +10% against +2% in cost of sales. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 23% of net operating assets, against an accruals ratio of 13.4%. 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.
121d
FY2025→FY2026
Inventory days.Days inventory outstanding moved from 114 to 121 FY2025→FY2026 (against cost of goods sold; inventory +10% vs +2% in cost of sales). Inventory is building a little faster than sales — watch for markdowns.
111% of FCF
FY2026
Shareholder returns.Returned $1.2B to shareholders (buybacks + dividends) in FY2026 — 111% of free cash flow, but 89% 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. Counting the $107M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 121%.
Key fundamentals
Latest Revenue$7.81B
Revenue Growth YoY+1.2%
Revenue CAGR (2yr)+0.4%
Net Margin13.9%
Free Cash Flow$1.06B
Return on Equity51.5%
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 Williams Sonoma Inc's actual 10-K/10-Q/8-K filings?