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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-2.85 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Cheesecake Factory Inc has a M-score of -2.85 suggests that the company is not a manipulator.

CAKE' s Beneish M-Score Range Over the Past 10 Years
Min: -143.74   Max: 5.96
Current: -2.85

-143.74
5.96

During the past 13 years, the highest Beneish M-Score of Cheesecake Factory Inc was 5.96. The lowest was -143.74. And the median was -2.87.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Cheesecake Factory Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.2103+0.528 * 0.9697+0.404 * 1.0173+0.892 * 1.0608+0.115 * 1.011
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9874+4.679 * -0.13-0.327 * 1.0216
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $14 Mil.
Revenue was 560.018 + 558.862 + 553.693 + 526.841 = $2,199 Mil.
Gross Profit was 109.736 + 114.738 + 107.705 + 103.494 = $436 Mil.
Total Current Assets was $183 Mil.
Total Assets was $1,204 Mil.
Property, Plant and Equipment(Net PPE) was $903 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $143 Mil.
Total Current Liabilities was $304 Mil.
Long-Term Debt was $0 Mil.
Net Income was 34.574 + 38.585 + 33.954 + 27.2 = $134 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 64.744 + 75.478 + 76.308 + 74.337 = $291 Mil.
Accounts Receivable was $11 Mil.
Revenue was 526.688 + 529.107 + 517.973 + 499.673 = $2,073 Mil.
Gross Profit was 100.555 + 110.314 + 96.757 + 90.629 = $398 Mil.
Total Current Assets was $187 Mil.
Total Assets was $1,176 Mil.
Property, Plant and Equipment(Net PPE) was $874 Mil.
Depreciation, Depletion and Amortization(DDA) was $85 Mil.
Selling, General & Admin. Expense(SGA) was $136 Mil.
Total Current Liabilities was $291 Mil.
Long-Term Debt was $0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(13.95 / 2199.414) / (10.866 / 2073.441)
=0.0063426 / 0.00524056
=1.2103

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(398.255 / 2073.441) / (435.673 / 2199.414)
=0.19207443 / 0.19808594
=0.9697

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (182.897 + 902.581) / 1204.379) / (1 - (187.406 + 874.34) / 1175.856)
=0.09872391 / 0.0970442
=1.0173

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=2199.414 / 2073.441
=1.0608

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(84.772 / (84.772 + 874.34)) / (86.47 / (86.47 + 902.581))
=0.08838592 / 0.08742724
=1.011

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(142.884 / 2199.414) / (136.414 / 2073.441)
=0.06496458 / 0.06579112
=0.9874

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((0 + 304.103) / 1204.379) / ((0 + 290.636) / 1175.856)
=0.25249776 / 0.24716972
=1.0216

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(134.313 - 0 - 290.867) / 1204.379
=-0.13

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Cheesecake Factory Inc has a M-score of -2.85 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Cheesecake Factory Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.290.84831.03970.9081.37640.66121.2480.66711.42970.8783
GMI 1.02181.00871.03430.96422.33491.01820.95110.96031.06670.935
AQI 0.65080.88290.90181.02271.02681.01491.04171.02431.00991.016
SGI 1.11271.14921.06270.99731.03581.05921.02921.03811.05261.0627
DEPI 1.02050.97520.88290.90150.99881.0060.97650.98710.98871.0389
SGAI 1.22240.98350.81481.05620.91760.94941.05131.06111.10510.9688
LVGI 1.11612.18551.17860.71170.68671.10761.06121.01461.16441.0374
TATA -0.0706-0.0761-0.1014-0.148-0.0807-0.0979-0.0888-0.0804-0.1176-0.0964
M-score -2.65-3.27-2.92-3.20-1.65-3.21-2.68-3.16-2.62-3.02

Cheesecake Factory Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.80590.94371.42971.02030.90410.92890.87830.97481.55091.2103
GMI 2.502917.95970.41260.40590.39990.07350.9350.9340.95930.9697
AQI 1.13371.06061.00991.01610.99951.00031.0160.99680.99271.0173
SGI 1.03831.04521.05261.06161.06411.06221.06271.06121.05881.0608
DEPI 0.99630.98630.98870.98221.00611.02541.03891.03881.02041.011
SGAI 1.07781.05091.0651.04861.08521.04231.00531.0090.96770.9874
LVGI 1.33451.20891.16441.08331.06210.951.03740.89790.91871.0216
TATA -0.1159-0.0956-0.1176-0.1069-0.1078-0.1071-0.0964-0.1042-0.1165-0.13
M-score -2.445.96-2.96-3.25-3.37-3.47-3.02-2.94-2.46-2.85
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