AnalystBook Research · Intelligence Report

How common are red flags? The forensic read across 2,800 companies

2026-07-09 · 4 min read · Arda Solmaz · every number computed from SEC filings

1 in 7 companies trip the Beneish manipulation line (351 of 2,392)13.7% of non-financials look "safe" to the 1968 Altman formula101 companies carry the distress and manipulation flags at once

Every covered company in AnalystBook gets the classic forensic models computed from its own filings — the Altman Z-Score for distress, the Beneish M-Score for earnings manipulation, an accruals read for earnings quality. Run across the whole record at once — 2,834 companies with a scored fiscal year of 2024 or later — the models say something most people quoting them one company at a time never see.

1. One company in seven trips the manipulation line

The Beneish M-Score flags a company when its combination of receivables growth, margin swings, accruals and other inputs resembles historical manipulators. Across the 2,392 companies where the model could be computed, 351 — 14.7%, about 1 in 7 — are over the published −1.78 line. That number is the point: a flag this common is a reading list, not an accusation. It tells you where to spend an hour with the accruals and the receivables footnote — and 6 times out of 7, the explanation is a business change, an acquisition, or a one-off. The seventh is why you look.

2. Half the market looks “distressed” to a 1968 formula

Of the 1,468 non-financial companies with an Altman zone (banks and insurers are excluded — the model was never built for them), only 201 — 13.7% — sit in the “safe” zone. 539 are grey, and 728 — nearly half — are in the “distress” zone. Read literally, that would mean half the market is headed for bankruptcy. It isn't. The formula was calibrated on 1960s manufacturers, and today's market is full of companies it was never taught: pre-profit biotechs, R&D-heavy software, asset-light services. For them a “distress” label is mostly a description of their business model's shape, not their prospects — Apple itself scores “grey”, which its intelligence page plainly calls a formula quirk. What the zones are still excellent at is direction: a company sliding from safe toward distress year over year is telling you something no single-year label can.

3. 101 companies carry both flags at once

Where the models get genuinely interesting is agreement. 101 companies are simultaneously in the Altman distress zone and over the Beneish manipulation line — financial strain and manipulation-shaped accounting in the same set of statements. That's the combination behind many of the market's historical blow-ups, and at ~7% of the Altman universe it's a shortlist a person can actually read through. That is the job of a computed record: not to shout “fraud”, but to reduce 6,000 companies to the hundred where the models agree you should look closely.

How we countedFull record, no sampling

Universe: the 2,834 companies in AnalystBook's record whose most recent scored fiscal year is 2024 or later (one year per company — the latest). Beneish M-Score computed for 2,392 of them (the rest lack an input, most often a prior-year comparison); flag = M > −1.78, the model's published threshold. Altman Z computed with the formula variant appropriate to each company; banks and insurers are excluded as not applicable, leaving 1,468. Two companies with corrupted fiscal-year metadata were excluded. All scores are computed by AnalystBook from SEC filings — no third-party data. Shares are of each model's own computable universe, stated inline. As of 2026-07-09; the record updates as new filings land. For research purposes only; not investment advice.

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