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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

CAKE' s 10-Year Beneish M-Score Range
Min: -78.44   Max: 4.21
Current: -2.9

-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 -2.87.


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 * 1.0203+0.528 * 1.0483+0.404 * 1.0161+0.892 * 1.0616+0.115 * 0.9822
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9668+4.679 * -0.1069-0.327 * 1.0833
=-2.90

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $13 Mil.
Revenue was 517.973 + 499.673 + 499.114 + 496.406 = $2,013 Mil.
Gross Profit was 96.757 + 90.629 + 88.712 + 95.385 = $371 Mil.
Total Current Assets was $189 Mil.
Total Assets was $1,129 Mil.
Property, Plant and Equipment(Net PPE) was $829 Mil.
Depreciation, Depletion and Amortization(DDA) was $84 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $298 Mil.
Long-Term Debt was $25 Mil.
Net Income was 28.423 + 24.486 + 24.223 + 30.049 = $107 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 65.348 + 78.671 + 38.87 + 44.992 = $228 Mil.
Accounts Receivable was $12 Mil.
Revenue was 481.431 + 475.075 + 469.699 + 470.118 = $1,896 Mil.
Gross Profit was 86.986 + 95.213 + 92.404 + 92.204 = $367 Mil.
Total Current Assets was $167 Mil.
Total Assets was $1,074 Mil.
Property, Plant and Equipment(Net PPE) was $803 Mil.
Depreciation, Depletion and Amortization(DDA) was $80 Mil.
Selling, General & Admin. Expense(SGA) was $129 Mil.
Total Current Liabilities was $258 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)
=(12.643 / 2013.166) / (11.672 / 1896.323)
=0.00628016 / 0.00615507
=1.0203

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)
=(90.629 / 1896.323) / (96.757 / 2013.166)
=0.19343066 / 0.18452676
=1.0483

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 - (188.776 + 828.966) / 1128.726) / (1 - (166.515 + 803.334) / 1073.756)
=0.09832679 / 0.09676966
=1.0161

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
=2013.166 / 1896.323
=1.0616

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))
=(79.579 / (79.579 + 803.334)) / (83.761 / (83.761 + 828.966))
=0.09013232 / 0.09177005
=0.9822

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)
=(131.892 / 2013.166) / (128.504 / 1896.323)
=0.06551472 / 0.06776483
=0.9668

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)
=((25 + 297.775) / 1128.726) / ((25 + 258.448) / 1073.756)
=0.285964 / 0.26397804
=1.0833

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
=(107.181 - 0 - 227.881) / 1128.726
=-0.1069

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 -2.90 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.2480.95631.03730.89330.66711.28630.80590.94371.42971.0203
GMI 2.59352.50632.512614.87070.35210.37120.37960.08871.06671.0483
AQI 1.04170.99420.96010.99771.02431.06731.13371.06061.00991.0161
SGI 1.02921.03481.02951.0251.03811.03271.03831.04521.05261.0616
DEPI 0.97650.97640.98430.99580.98710.99750.99630.98630.98870.9822
SGAI 1.05131.00111.00051.1161.14521.19331.18081.07141.0040.9668
LVGI 1.06121.02961.0571.1281.01461.26371.33451.20891.16441.0833
TATA -0.0888-0.0898-0.0947-0.1063-0.0804-0.1166-0.1159-0.0956-0.1176-0.1069
M-score -1.81-2.13-2.104.21-3.49-3.16-3.58-3.48-2.60-2.90
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