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Cheesecake Factory Inc (NAS:CAKE)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Cheesecake Factory Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

CAKE' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Cheesecake Factory Inc was 9. The lowest was 3. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 26.176 + 27.2 + 33.954 + 38.585 = $126 Mil.
Cash Flow from Operations was 40.12 + 74.337 + 76.308 + 75.478 = $266 Mil.
Revenue was 526.688 + 526.841 + 553.693 + 558.862 = $2,166 Mil.
Gross Profit was 100.555 + 103.494 + 107.705 + 114.738 = $426 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(1174.79 + 1175.856 + 1233.346 + 1192.651 + 1204.318) / 5 = $1196.1922 Mil.
Total Assets at the begining of this year (Jun15) was $1,175 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $198 Mil.
Total Current Liabilities was $304 Mil.
Net Income was 24.223 + 24.486 + 28.423 + 34.724 = $112 Mil.

Revenue was 499.114 + 499.673 + 517.973 + 529.107 = $2,046 Mil.
Gross Profit was 88.712 + 90.629 + 96.757 + 110.314 = $386 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(1080.521 + 1105.514 + 1161.376 + 1128.726 + 1174.79) / 5 = $1130.1854 Mil.
Total Assets at the begining of last year (Jun14) was $1,081 Mil.
Long-Term Debt was $25 Mil.
Total Current Assets was $208 Mil.
Total Current Liabilities was $298 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Cheesecake Factory Inc's current net income (TTM) was 126. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Cheesecake Factory Inc's current cash flow from operations (TTM) was 266. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Jun15)
=125.915/1174.79
=0.10718086

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=111.856/1080.521
=0.10352043

Cheesecake Factory Inc's return on assets of this year was 0.10718086. Cheesecake Factory Inc's return on assets of last year was 0.10352043. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Cheesecake Factory Inc's current net income (TTM) was 126. Cheesecake Factory Inc's current cash flow from operations (TTM) was 266. ==> 266 > 126 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=0/1196.1922
=0

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=25/1130.1854
=0.02212026

Cheesecake Factory Inc's gearing of this year was 0. Cheesecake Factory Inc's gearing of last year was 0.02212026. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Jun16)=Total Current Assets/Total Current Liabilities
=197.972/304.424
=0.65031666

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=207.853/298.241
=0.69692966

Cheesecake Factory Inc's current ratio of this year was 0.65031666. Cheesecake Factory Inc's current ratio of last year was 0.69692966. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Cheesecake Factory Inc's number of shares in issue this year was 49.6. Cheesecake Factory Inc's number of shares in issue last year was 50.3. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=426.492/2166.084
=0.19689541

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=386.412/2045.867
=0.18887445

Cheesecake Factory Inc's gross margin of this year was 0.19689541. Cheesecake Factory Inc's gross margin of last year was 0.18887445. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Jun15)
=2166.084/1174.79
=1.84380528

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=2045.867/1080.521
=1.8934079

Cheesecake Factory Inc's asset turnover of this year was 1.84380528. Cheesecake Factory Inc's asset turnover of last year was 1.8934079. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+0+1+1+0
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Cheesecake Factory Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Cheesecake Factory Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0000111101
Question 4 1111111111
Question 5 1001111111
Question 6 0010101000
Question 7 1111011111
Question 8 1000100101
Question 9 0100111011
F-score 6555878768

Cheesecake Factory Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 1010011111
Question 4 1111111111
Question 5 0001111111
Question 6 0000010000
Question 7 1111111111
Question 8 1110001111
Question 9 0001111110
F-score 6566688887
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