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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-3.46 (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 -3.46 suggests that the company is not a manipulator.

CAKE' s 10-Year Beneish M-Score Range
Min: -78.44   Max: 4.21
Current: -3.46

-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 * 0.9437+0.528 * 0.0887+0.404 * 1.0606+0.892 * 1.0452+0.115 * 0.9863
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9469+4.679 * -0.0956-0.327 * 1.2089
=-3.46

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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 $115 Mil.
Total Current Liabilities was $263 Mil.
Long-Term Debt was $25 Mil.
Net Income was 24.223 + 30.049 + 22.518 + 33 = $110 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 38.87 + 44.992 + 77.116 + 54.468 = $215 Mil.
Accounts Receivable was $11 Mil.
Revenue was 469.699 + 470.118 + 463.018 + 464.695 = $1,868 Mil.
Gross Profit was 92.404 + 92.204 + 86.764 + -240.276 = $31 Mil.
Total Current Assets was $216 Mil.
Total Assets was $1,101 Mil.
Property, Plant and Equipment(Net PPE) was $784 Mil.
Depreciation, Depletion and Amortization(DDA) was $77 Mil.
Selling, General & Admin. Expense(SGA) was $116 Mil.
Total Current Liabilities was $237 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)
=(11.013 / 1952.026) / (11.165 / 1867.53)
=0.00564183 / 0.00597848
=0.9437

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)
=(95.385 / 1867.53) / (88.712 / 1952.026)
=0.01665087 / 0.18764914
=0.0887

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 - (173.852 + 824.41) / 1105.514) / (1 - (216.091 + 784.319) / 1101.138)
=0.09701551 / 0.09147627
=1.0606

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
=1952.026 / 1867.53
=1.0452

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))
=(76.999 / (76.999 + 784.319)) / (82.167 / (82.167 + 824.41))
=0.08939672 / 0.09063433
=0.9863

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)
=(115.187 / 1952.026) / (116.378 / 1867.53)
=0.05900895 / 0.06231654
=0.9469

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 + 262.64) / 1105.514) / ((0 + 236.985) / 1101.138)
=0.26018666 / 0.21521826
=1.2089

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
=(109.79 - 0 - 215.446) / 1105.514
=-0.0956

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 -3.46 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.92120.78291.290.84831.03970.9081.37640.66121.2480.6671
GMI 1.20440.97891.02181.00871.03432.37090.94961.01820.95110.9603
AQI 1.11520.74460.65080.88290.90181.02271.02681.01491.04171.0243
SGI 1.25251.21961.11271.14921.06270.99731.03581.05921.02921.0381
DEPI 1.05480.99961.02050.97520.88290.90150.99881.0060.97650.9871
SGAI 0.15771.03771.22240.98350.81481.02180.94850.94941.05131.0611
LVGI 1.03820.9691.11612.18551.17860.71170.68671.10761.06121.0146
TATA -0.113-0.0844-0.0706-0.0761-0.1014-0.148-0.083-0.0981-0.0888-0.0804
M-score -2.56-2.99-2.65-3.27-2.92-2.45-2.39-3.21-2.68-3.16

Cheesecake Factory Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.65460.87181.2480.95631.03730.89330.66711.28630.80590.9437
GMI 0.97170.71692.59352.50632.512614.87070.35210.37120.37960.0887
AQI 1.01311.021.04170.99420.96010.99771.02431.06731.13371.0606
SGI 1.06771.07391.02921.03481.02951.0251.03811.03271.03831.0452
DEPI 0.970.96280.97650.97640.98430.99580.98710.99750.99630.9863
SGAI 0.99180.98181.05131.00111.00051.1161.02581.05271.0430.9469
LVGI 0.95390.98061.06121.02961.0571.1281.01461.26371.33451.2089
TATA -0.0756-0.0887-0.0888-0.0898-0.0947-0.1063-0.0804-0.1166-0.1159-0.0956
M-score -2.17-3.08-1.81-2.13-2.104.21-3.47-3.13-3.56-3.46
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