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Cheesecake Factory Inc (NAS:CAKE)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

CAKE' s Beneish M-Score Range Over the Past 10 Years
Min: -78.44   Max: 4.19
Current: -2.47

-78.44
4.19

During the past 13 years, the highest Beneish M-Score of Cheesecake Factory Inc was 4.19. The lowest was -78.44. And the median was -2.85.


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 * 1.5509+0.528 * 0.9593+0.404 * 0.9927+0.892 * 1.0588+0.115 * 1.0204
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0387+4.679 * -0.1165-0.327 * 0.9187
=-2.47

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $14 Mil.
Revenue was 558.862 + 553.693 + 526.841 + 526.688 = $2,166 Mil.
Gross Profit was 114.738 + 107.705 + 103.494 + 100.555 = $426 Mil.
Total Current Assets was $198 Mil.
Total Assets was $1,204 Mil.
Property, Plant and Equipment(Net PPE) was $889 Mil.
Depreciation, Depletion and Amortization(DDA) was $86 Mil.
Selling, General & Admin. Expense(SGA) was $135 Mil.
Total Current Liabilities was $304 Mil.
Long-Term Debt was $0 Mil.
Net Income was 38.585 + 33.954 + 27.2 + 26.176 = $126 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 75.478 + 76.308 + 74.337 + 40.12 = $266 Mil.
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 $122 Mil.
Total Current Liabilities was $298 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)
=(14.468 / 2166.084) / (8.811 / 2045.867)
=0.00667933 / 0.00430673
=1.5509

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)
=(386.412 / 2045.867) / (426.492 / 2166.084)
=0.18887445 / 0.19689541
=0.9593

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 - (197.972 + 888.849) / 1204.318) / (1 - (207.853 + 851.477) / 1174.79)
=0.0975631 / 0.09828139
=0.9927

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
=2166.084 / 2045.867
=1.0588

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))
=(84.385 / (84.385 + 851.477)) / (86.153 / (86.153 + 888.849))
=0.09016821 / 0.08836187
=1.0204

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)
=(134.595 / 2166.084) / (122.388 / 2045.867)
=0.06213748 / 0.05982207
=1.0387

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 + 304.424) / 1204.318) / ((25 + 298.241) / 1174.79)
=0.25277709 / 0.2751479
=0.9187

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
=(125.915 - 0 - 266.243) / 1204.318
=-0.1165

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 -2.47 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.290.84831.03970.9081.37640.66121.2480.66711.42970.8783
GMI 1.02181.00871.03432.37090.94961.01820.95110.96031.06670.935
AQI 0.65080.88290.90181.02271.02681.01491.04171.02431.0231.0029
SGI 1.11271.14921.06270.99731.03581.05921.02921.03811.05261.0627
DEPI 1.02050.97520.88290.90150.99881.0060.97650.98710.98871.0389
SGAI 1.22240.98350.81481.02180.94850.94941.17530.94910.98621.0856
LVGI 1.11612.18551.17860.71170.68671.10761.06121.01461.17951.0242
TATA -0.0706-0.0761-0.1014-0.148-0.083-0.0981-0.0888-0.0804-0.1191-0.0964
M-score -2.65-3.27-2.92-2.45-2.39-3.21-2.70-3.14-2.61-3.04

Cheesecake Factory Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.28630.80590.94371.42971.02030.90410.92890.87830.97481.5509
GMI 0.37120.37960.08871.06671.04831.01890.9770.9350.9340.9593
AQI 1.06731.13371.06061.0231.01610.99951.00031.00290.99680.9927
SGI 1.03271.03831.04521.05261.06161.06411.06221.06271.06121.0588
DEPI 0.99750.99630.98630.98870.98221.00611.02541.03891.03881.0204
SGAI 0.96030.9740.89251.02020.96720.9630.99111.04211.06511.0387
LVGI 1.26371.33451.20891.17951.08331.06210.951.02420.89790.9187
TATA -0.1166-0.1159-0.0956-0.1191-0.1069-0.1078-0.1071-0.0964-0.1042-0.1165
M-score -3.12-3.55-3.45-2.61-2.90-3.02-2.98-3.03-2.95-2.47
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