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Element Solutions earnings quality score
How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show
Score49 / 100 · grade D · rank 894 of 1027
Element Solutions (ESI) scores 49 of 100 for earnings quality, grade D: rank 894 of 1027 companies and 77 of 82 in materials. It loses the most points on adjusted earnings 52% below GAAP, Montier C-score 3 of 5 checks failed, discretionary accruals of -4.7% of assets (modified Jones), larger than most. It earns full or near-full marks for Dechow F-score 0.54 (normal). Revenue grew 40% in the year: fast growth raises accruals, the Beneish and Dechow scores and the C-score by construction, so a growing company scores lower than a steady one with the same accounting.
What earned and lost points
| Component | What the filings show | Points | Of |
|---|---|---|---|
| Dechow F-score | Dechow F-score 0.54 (normal) | 30 | 30 |
| Montier C-score | Montier C-score 3 of 5 checks failed | 12 | 30 |
| Discretionary accruals | discretionary accruals of -4.7% of assets (modified Jones), larger than most | 7 | 20 |
| Non-GAAP gap | adjusted earnings 52% below GAAP | 0 | 20 |
How the score is built
Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.
Every company ranked → The full quality workbench, live → Element Solutions: cash flow →
Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.