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Brinker International Inc (NYSE:EAT)
Beneish M-Score
-3.17 (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.

Brinker International Inc has a M-score of -3.17 suggests that the company is not a manipulator.

EAT' s 10-Year Beneish M-Score Range
Min: -6.27   Max: 2.43
Current: -3.17

-6.27
2.43

During the past 13 years, the highest Beneish M-Score of Brinker International Inc was 2.43. The lowest was -6.27. And the median was -3.03.


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 Brinker International 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 * 0.9531+0.528 * 0.9801+0.404 * 0.9733+0.892 * 1.0397+0.115 * 0.9393
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9881+4.679 * -0.1332-0.327 * 1.0958
=-3.17

* 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 $43 Mil.
Revenue was 784.215 + 742.898 + 711.018 + 755.837 = $2,994 Mil.
Gross Profit was 166.539 + 142.505 + 123.419 + 155.043 = $588 Mil.
Total Current Assets was $190 Mil.
Total Assets was $1,437 Mil.
Property, Plant and Equipment(Net PPE) was $1,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $143 Mil.
Selling, General & Admin. Expense(SGA) was $139 Mil.
Total Current Liabilities was $407 Mil.
Long-Term Debt was $933 Mil.
Net Income was 65.427 + 41.306 + 32.738 + 28.82 = $168 Mil.
Non Operating Income was 0.454 + 0.611 + 0.503 + 0.478 = $2 Mil.
Cash Flow from Operations was 112.442 + 91.567 + 70.898 + 82.742 = $358 Mil.
Accounts Receivable was $43 Mil.
Revenue was 759.293 + 705.662 + 684.66 + 730.068 = $2,880 Mil.
Gross Profit was 157.505 + 129.42 + 117.596 + 149.312 = $554 Mil.
Total Current Assets was $195 Mil.
Total Assets was $1,450 Mil.
Property, Plant and Equipment(Net PPE) was $1,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $134 Mil.
Selling, General & Admin. Expense(SGA) was $136 Mil.
Total Current Liabilities was $416 Mil.
Long-Term Debt was $817 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)
=(43.083 / 2993.968) / (43.476 / 2879.683)
=0.01438993 / 0.0150975
=0.9531

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)
=(142.505 / 2879.683) / (166.539 / 2993.968)
=0.19232429 / 0.19622989
=0.9801

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 - (190.046 + 1037.425) / 1437.319) / (1 - (195.156 + 1037.409) / 1450.078)
=0.1459996 / 0.1500009
=0.9733

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
=2993.968 / 2879.683
=1.0397

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))
=(133.563 / (133.563 + 1037.409)) / (143.382 / (143.382 + 1037.425))
=0.11406165 / 0.12142713
=0.9393

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)
=(139.343 / 2993.968) / (135.644 / 2879.683)
=0.04654125 / 0.0471038
=0.9881

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)
=((933.207 + 406.641) / 1437.319) / ((817.259 + 416.294) / 1450.078)
=0.93218555 / 0.85068045
=1.0958

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
=(168.291 - 2.046 - 357.649) / 1437.319
=-0.1332

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.

Brinker International Inc has a M-score of -3.17 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.

Brinker International Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
DSRI 1.13631.08860.89991.08431.22361.0450.98120.99271.0071.0633
GMI 4.42420.93540.24261.0064.56740.98530.92070.95780.95140.9853
AQI 0.85830.92140.92441.2170.97331.30211.16310.98521.09390.9973
SGI 1.01131.10711.05430.96760.77360.87250.9661.02151.0091.0209
DEPI 0.97961.04310.83931.17221.03750.8750.99051.01320.950.9871
SGAI 0.06931.221612.04671.00920.07421.05981.04731.01820.97050.9603
LVGI 0.85881.15771.31761.10060.89520.90231.16281.12391.17291.0802
TATA -0.128-0.1192-0.1133-0.1431-0.1053-0.1105-0.0843-0.1084-0.0895-0.1396
M-score -0.99-3.01-5.51-3.02-0.90-2.95-2.96-3.05-2.93-3.09

Brinker International Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.89930.95631.0070.84621.0771.11631.06331.26511.11040.9531
GMI 0.9540.94410.95140.9670.96980.97540.98530.98490.97590.9801
AQI 1.01081.00811.09391.09111.08521.07880.99731.01230.9740.9733
SGI 1.02111.01231.0091.0041.00681.01241.02091.02971.0371.0397
DEPI 0.98150.95420.950.94980.96190.98670.98710.97710.96250.9393
SGAI 1.02870.97370.97120.92730.92140.93820.96030.95920.97330.9881
LVGI 1.12431.11.17291.14731.11591.15171.08021.07451.0991.0958
TATA -0.1111-0.0907-0.0895-0.1053-0.0951-0.1213-0.1396-0.149-0.1408-0.1332
M-score -3.14-2.99-2.93-3.13-2.86-2.95-3.09-2.93-3.06-3.17
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