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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-3.37 (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 -3.37 suggests that the company is not a manipulator.

CAKE' s 10-Year Beneish M-Score Range
Min: -143.74   Max: 5.95
Current: -3.37

-143.74
5.95

During the past 13 years, the highest Beneish M-Score of Cheesecake Factory Inc was 5.95. The lowest was -143.74. 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 * 0.9041+0.528 * 0.3999+0.404 * 0.9995+0.892 * 1.0641+0.115 * 1.0061
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0846+4.679 * -0.1078-0.327 * 1.0621
=-3.37

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $9 Mil.
Revenue was 529.107 + 517.973 + 499.673 + 499.114 = $2,046 Mil.
Gross Profit was 110.314 + 96.757 + 90.629 + 88.712 = $386 Mil.
Total Current Assets was $208 Mil.
Total Assets was $1,175 Mil.
Property, Plant and Equipment(Net PPE) was $851 Mil.
Depreciation, Depletion and Amortization(DDA) was $84 Mil.
Selling, General & Admin. Expense(SGA) was $142 Mil.
Total Current Liabilities was $298 Mil.
Long-Term Debt was $25 Mil.
Net Income was 34.724 + 28.423 + 24.486 + 24.223 = $112 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 55.618 + 65.348 + 78.671 + 38.87 = $239 Mil.
Accounts Receivable was $9 Mil.
Revenue was 496.406 + 481.431 + 475.075 + 469.699 = $1,923 Mil.
Gross Profit was 95.385 + 86.986 + -243.525 + 206.359 = $145 Mil.
Total Current Assets was $163 Mil.
Total Assets was $1,081 Mil.
Property, Plant and Equipment(Net PPE) was $811 Mil.
Depreciation, Depletion and Amortization(DDA) was $81 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $255 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)
=(8.811 / 2045.867) / (9.158 / 1922.611)
=0.00430673 / 0.00476331
=0.9041

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)
=(96.757 / 1922.611) / (110.314 / 2045.867)
=0.0755249 / 0.18887445
=0.3999

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 - (207.853 + 851.477) / 1174.79) / (1 - (163.415 + 810.855) / 1080.521)
=0.09828139 / 0.09833312
=0.9995

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
=2045.867 / 1922.611
=1.0641

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))
=(80.898 / (80.898 + 810.855)) / (84.385 / (84.385 + 851.477))
=0.09071795 / 0.09016821
=1.0061

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)
=(142.253 / 2045.867) / (123.254 / 1922.611)
=0.06953189 / 0.06410761
=1.0846

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 + 298.241) / 1174.79) / ((25 + 254.913) / 1080.521)
=0.2751479 / 0.25905373
=1.0621

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
=(111.856 - 0 - 238.507) / 1174.79
=-0.1078

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 -3.37 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 0.97891.02181.00871.03430.96422.33491.01820.95110.96031.0667
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 1.03771.22240.98350.81481.05620.91760.94941.05131.06111.1051
LVGI 0.9691.11612.18551.17860.71170.68671.10761.06121.01461.1644
TATA -0.0844-0.0706-0.0761-0.1014-0.148-0.0807-0.0979-0.0888-0.0804-0.1176
M-score -2.99-2.65-3.27-2.92-3.20-1.65-3.21-2.68-3.16-2.62

Cheesecake Factory Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.95631.03730.89330.66711.28630.80590.94371.42971.02030.9041
GMI 0.95330.9710.73052.48252.52012.502917.95970.41260.40590.3999
AQI 0.99420.96010.99771.02431.06731.13371.06061.00991.01610.9995
SGI 1.03481.02951.0251.03811.03271.03831.04521.05261.06161.0641
DEPI 0.97640.98430.99580.98710.99750.99630.98630.98870.98221.0061
SGAI 1.00111.00051.07561.06111.10891.12181.09221.10511.0611.0846
LVGI 1.02961.0571.1281.01461.26371.33451.20891.16441.08331.0621
TATA -0.0898-0.0947-0.1063-0.0804-0.1166-0.1159-0.0956-0.1176-0.1069-0.1078
M-score -2.95-2.91-3.25-2.35-2.01-2.455.95-2.97-3.25-3.37
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