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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

CAKE' s 10-Year Beneish M-Score Range
Min: -3.49   Max: -1.52
Current: -2.6

-3.49
-1.52

During the past 13 years, the highest Beneish M-Score of Cheesecake Factory Inc was -1.52. The lowest was -3.49. And the median was -2.71.


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 * 1.4297+0.528 * 1.0667+0.404 * 1.0099+0.892 * 1.0526+0.115 * 0.9887
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9868+4.679 * -0.1176-0.327 * 1.1644
=-2.60

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $15 Mil.
Revenue was 499.673 + 499.114 + 496.406 + 481.431 = $1,977 Mil.
Gross Profit was 90.629 + 88.712 + 95.385 + 86.986 = $362 Mil.
Total Current Assets was $239 Mil.
Total Assets was $1,176 Mil.
Property, Plant and Equipment(Net PPE) was $828 Mil.
Depreciation, Depletion and Amortization(DDA) was $83 Mil.
Selling, General & Admin. Expense(SGA) was $129 Mil.
Total Current Liabilities was $322 Mil.
Long-Term Debt was $0 Mil.
Net Income was 24.486 + 24.223 + 30.049 + 22.518 = $101 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 78.671 + 38.87 + 44.992 + 77.116 = $240 Mil.
Accounts Receivable was $10 Mil.
Revenue was 475.075 + 469.699 + 470.118 + 463.018 = $1,878 Mil.
Gross Profit was 95.213 + 92.404 + 92.204 + 86.764 = $367 Mil.
Total Current Assets was $226 Mil.
Total Assets was $1,124 Mil.
Property, Plant and Equipment(Net PPE) was $795 Mil.
Depreciation, Depletion and Amortization(DDA) was $79 Mil.
Selling, General & Admin. Expense(SGA) was $124 Mil.
Total Current Liabilities was $264 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)
=(15.17 / 1976.624) / (10.081 / 1877.91)
=0.0076747 / 0.0053682
=1.4297

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)
=(88.712 / 1877.91) / (90.629 / 1976.624)
=0.19520904 / 0.18299484
=1.0667

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 - (239.462 + 828.305) / 1176.452) / (1 - (225.903 + 795.379) / 1124.114)
=0.09238371 / 0.09147827
=1.0099

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
=1976.624 / 1877.91
=1.0526

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))
=(78.558 / (78.558 + 795.379)) / (82.835 / (82.835 + 828.305))
=0.08988977 / 0.09091358
=0.9887

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)
=(128.608 / 1976.624) / (123.817 / 1877.91)
=0.06506447 / 0.0659334
=0.9868

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 + 322.011) / 1176.452) / ((0 + 264.247) / 1124.114)
=0.27371367 / 0.23507135
=1.1644

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
=(101.276 - 0 - 239.649) / 1176.452
=-0.1176

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 -2.60 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.87181.2480.95631.03730.89330.66711.28630.80590.94371.4297
GMI 0.71692.59352.50632.512614.87070.35210.37120.37960.08871.0667
AQI 1.021.04170.99420.96010.99771.02431.06731.13371.06061.0099
SGI 1.07391.02921.03481.02951.0251.03811.03271.03831.04521.0526
DEPI 0.96280.97650.97640.98430.99580.98710.99750.99630.98630.9887
SGAI 0.98181.05131.00111.00051.1161.14521.17251.16051.0530.9868
LVGI 0.98061.06121.02961.0571.1281.01461.26371.33451.20891.1644
TATA -0.0887-0.0888-0.0898-0.0947-0.1063-0.0804-0.1166-0.1159-0.0956-0.1176
M-score -3.08-1.81-2.13-2.104.21-3.49-3.15-3.58-3.47-2.60
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