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Brinker International Inc (NYSE:EAT)
Beneish M-Score
-3.13 (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 -3.13 suggests that the company is not a manipulator.

EAT' s 10-Year Beneish M-Score Range
Min: -6.16   Max: -0.89
Current: -3.13

-6.16
-0.89

During the past 13 years, the highest Beneish M-Score of Brinker International Inc was -0.89. The lowest was -6.16. And the median was -2.96.


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 * 0.9429+0.528 * 0.9716+0.404 * 0.9954+0.892 * 1.0326+0.115 * 0.9249
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9714+4.679 * -0.1212-0.327 * 1.1108
=-3.13

* 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 $47 Mil.
Revenue was 764.147 + 784.215 + 742.898 + 711.018 = $3,002 Mil.
Gross Profit was 162.212 + 166.539 + 142.505 + 123.419 = $595 Mil.
Total Current Assets was $190 Mil.
Total Assets was $1,436 Mil.
Property, Plant and Equipment(Net PPE) was $1,032 Mil.
Depreciation, Depletion and Amortization(DDA) was $145 Mil.
Selling, General & Admin. Expense(SGA) was $135 Mil.
Total Current Liabilities was $418 Mil.
Long-Term Debt was $971 Mil.
Net Income was 57.223 + 65.427 + 41.306 + 32.738 = $197 Mil.
Non Operating Income was 0.513 + 0.454 + 0.611 + 0.503 = $2 Mil.
Cash Flow from Operations was 93.704 + 112.442 + 91.567 + 70.898 = $369 Mil.
Accounts Receivable was $48 Mil.
Revenue was 759.88 + 759.293 + 704.395 + 683.924 = $2,907 Mil.
Gross Profit was 155.043 + 157.505 + 129.42 + 117.596 = $560 Mil.
Total Current Assets was $211 Mil.
Total Assets was $1,491 Mil.
Property, Plant and Equipment(Net PPE) was $1,056 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General & Admin. Expense(SGA) was $134 Mil.
Total Current Liabilities was $466 Mil.
Long-Term Debt was $832 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)
=(46.588 / 3002.278) / (47.85 / 2907.492)
=0.01551755 / 0.01645748
=0.9429

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)
=(166.539 / 2907.492) / (162.212 / 3002.278)
=0.1924559 / 0.1980746
=0.9716

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 - (189.717 + 1032.044) / 1435.873) / (1 - (210.854 + 1056.454) / 1490.604)
=0.14911625 / 0.14980236
=0.9954

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
=3002.278 / 2907.492
=1.0326

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))
=(136.081 / (136.081 + 1056.454)) / (145.242 / (145.242 + 1032.044))
=0.1141107 / 0.12337019
=0.9249

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)
=(134.649 / 3002.278) / (134.234 / 2907.492)
=0.04484894 / 0.04616831
=0.9714

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)
=((970.825 + 418.475) / 1435.873) / ((832.302 + 466.11) / 1490.604)
=0.96756468 / 0.87106435
=1.1108

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
=(196.694 - 2.081 - 368.611) / 1435.873
=-0.1212

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 -3.13 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

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
DSRI 1.08860.89991.08431.10731.15480.98120.99270.86441.23860.9422
GMI 0.93540.24261.0060.99391.00894.13230.95780.95140.98530.9723
AQI 0.92140.92441.2170.97331.30211.16310.98751.09130.99730.9954
SGI 1.10711.05430.96760.85490.78950.9661.02151.0091.02091.0333
DEPI 1.04310.83931.17220.94120.96450.99051.01320.950.98710.9249
SGAI 1.221612.04671.00921.00340.99090.07981.05670.94540.98580.9467
LVGI 1.15771.31761.10060.89520.90231.16281.12651.16911.08121.1108
TATA -0.1192-0.1133-0.1431-0.1053-0.1105-0.0843-0.1086-0.0895-0.1396-0.1212
M-score -3.01-5.51-3.02-2.99-2.89-1.10-3.05-3.06-2.93-3.12

Brinker International Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.95630.86440.84641.07781.1171.23781.26361.10820.95120.9429
GMI 0.94410.95140.96680.96910.97470.9860.98610.97790.98210.9716
AQI 1.00811.09131.09111.08521.07880.99731.01230.9740.97330.9954
SGI 1.01231.0091.00381.00611.01171.02161.03091.03911.04181.0326
DEPI 0.95420.950.94980.96190.98670.98710.97710.96250.93930.9249
SGAI 1.00940.94540.90240.89690.91310.96070.95930.97310.98840.9714
LVGI 1.11.16911.14731.11591.15171.08121.07451.0991.09581.1108
TATA -0.0907-0.0895-0.1053-0.0951-0.1213-0.1396-0.149-0.1408-0.1332-0.1212
M-score -3.00-3.06-3.13-2.85-2.95-2.92-2.93-3.06-3.17-3.13
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