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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

CAKE' s Beneish M-Score Range Over the Past 10 Years
Min: -78.44   Max: 4.21
Current: -2.99

-78.44
4.21

During the past 13 years, the highest Beneish M-Score of Cheesecake Factory Inc was 4.21. The lowest was -78.44. And the median was -2.89.


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 * 0.9289+0.528 * 0.977+0.404 * 1.0003+0.892 * 1.0622+0.115 * 1.0254
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0356+4.679 * -0.1071-0.327 * 0.95
=-2.99

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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 $146 Mil.
Total Current Liabilities was $291 Mil.
Long-Term Debt was $0 Mil.
Net Income was 26.176 + 34.724 + 28.423 + 24.486 = $114 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 40.12 + 55.618 + 65.348 + 78.671 = $240 Mil.
Accounts Receivable was $11 Mil.
Revenue was 499.114 + 496.406 + 481.431 + 475.075 = $1,952 Mil.
Gross Profit was 88.712 + 95.385 + 86.986 + 95.213 = $366 Mil.
Total Current Assets was $174 Mil.
Total Assets was $1,106 Mil.
Property, Plant and Equipment(Net PPE) was $824 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $133 Mil.
Total Current Liabilities was $263 Mil.
Long-Term Debt was $25 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)
=(10.866 / 2073.441) / (11.013 / 1952.026)
=0.00524056 / 0.00564183
=0.9289

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)
=(110.314 / 1952.026) / (100.555 / 2073.441)
=0.18764914 / 0.19207443
=0.977

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 - (187.406 + 874.34) / 1175.856) / (1 - (173.852 + 824.41) / 1105.514)
=0.0970442 / 0.09701551
=1.0003

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
=2073.441 / 1952.026
=1.0622

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))
=(82.167 / (82.167 + 824.41)) / (84.772 / (84.772 + 874.34))
=0.09063433 / 0.08838592
=1.0254

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)
=(146.229 / 2073.441) / (132.935 / 1952.026)
=0.07052479 / 0.06810104
=1.0356

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 + 290.636) / 1175.856) / ((25 + 262.64) / 1105.514)
=0.24716972 / 0.26018666
=0.95

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
=(113.809 - 0 - 239.757) / 1175.856
=-0.1071

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 -2.99 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 own currency.

Cheesecake Factory Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.78291.290.84831.03970.9081.37640.66121.2480.66711.4297
GMI 0.97891.02181.00871.03432.37090.94961.01820.95110.96031.0667
AQI 0.74460.65080.88290.90181.02271.02681.01491.04171.02431.0099
SGI 1.21961.11271.14921.06270.99731.03581.05921.02921.03811.0526
DEPI 0.99961.02050.97520.88290.90150.99881.0060.97650.98710.9887
SGAI 1.03771.22240.98350.81481.02180.94850.94941.05131.18050.9934
LVGI 0.9691.11612.18551.17860.71170.68671.10761.06121.01461.1644
TATA -0.0844-0.0706-0.0761-0.1014-0.148-0.083-0.0981-0.0888-0.0804-0.1176
M-score -2.99-2.65-3.27-2.92-2.45-2.39-3.21-2.68-3.18-2.60

Cheesecake Factory Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.03730.89330.66711.28630.80590.94371.42971.02030.90410.9289
GMI 2.512614.87070.35210.37120.37960.08871.06671.04831.01890.977
AQI 0.96010.99771.02431.06731.13371.06061.00991.01610.99951.0003
SGI 1.02951.0251.03811.03271.03831.04521.05261.06161.06411.0622
DEPI 0.98430.99580.98710.99750.99630.98630.98870.98221.00611.0254
SGAI 1.00051.1161.14521.19331.20461.09281.0240.98591.01011.0356
LVGI 1.0571.1281.01461.26371.33451.20891.16441.08331.06210.95
TATA -0.0947-0.1063-0.0804-0.1166-0.1159-0.0956-0.1176-0.1069-0.1078-0.1071
M-score -2.104.21-3.49-3.16-3.59-3.48-2.61-2.90-3.03-2.99
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