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Brinker International, Inc. (NYSE:EAT)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

EAT' s 10-Year Beneish M-Score Range
Min: -6.48   Max: 3.51
Current: -2.85

-6.48
3.51

During the past 13 years, the highest Beneish M-Score of Brinker International, Inc. was 3.51. The lowest was -6.48. And the median was -3.02.


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 * 1.0778+0.528 * 0.9691+0.404 * 1.0852+0.892 * 1.0061+0.115 * 0.9619
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8976+4.679 * -0.0951-0.327 * 1.1159
=-2.85

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $87 Mil.
Revenue was 704.395 + 683.924 + 730.068 + 742.759 = $2,861 Mil.
Gross Profit was 129.42 + 117.596 + 149.312 + 148.084 = $544 Mil.
Total Current Assets was $247 Mil.
Total Assets was $1,490 Mil.
Property, Plant and Equipment(Net PPE) was $1,026 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $133 Mil.
Total Current Liabilities was $429 Mil.
Long-Term Debt was $806 Mil.
Net Income was 39.744 + 29.212 + 46.367 + 51.951 = $167 Mil.
Non Operating Income was 0.461 + 0.582 + 0.562 + 0.573 = $2 Mil.
Cash Flow from Operations was 91.905 + 55.416 + 68.052 + 91.359 = $307 Mil.
Accounts Receivable was $80 Mil.
Revenue was 689.764 + 683.507 + 728.371 + 742.045 = $2,844 Mil.
Gross Profit was 125.805 + 116.893 + 142.804 + 138.854 = $524 Mil.
Total Current Assets was $263 Mil.
Total Assets was $1,501 Mil.
Property, Plant and Equipment(Net PPE) was $1,038 Mil.
Depreciation, Depletion and Amortization(DDA) was $128 Mil.
Selling, General & Admin. Expense(SGA) was $148 Mil.
Total Current Liabilities was $431 Mil.
Long-Term Debt was $684 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)
=(87.277 / 2861.146) / (80.486 / 2843.687)
=0.03050421 / 0.0283034
=1.0778

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)
=(117.596 / 2843.687) / (129.42 / 2861.146)
=0.18439301 / 0.1902776
=0.9691

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 - (247.141 + 1026.402) / 1489.568) / (1 - (262.604 + 1037.976) / 1501.206)
=0.14502527 / 0.13364322
=1.0852

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
=2861.146 / 2843.687
=1.0061

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))
=(128.326 / (128.326 + 1037.976)) / (132.567 / (132.567 + 1026.402))
=0.11002811 / 0.11438356
=0.9619

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)
=(133.253 / 2861.146) / (147.557 / 2843.687)
=0.0465733 / 0.05188933
=0.8976

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)
=((806.215 + 428.955) / 1489.568) / ((684.171 + 431.384) / 1501.206)
=0.82921357 / 0.74310588
=1.1159

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
=(167.274 - 2.178 - 306.732) / 1489.568
=-0.0951

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 -2.85 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

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
DSRI 0.93331.13631.08860.89991.08432.25220.56780.98121.01690.9538
GMI 0.24624.42420.93540.24261.0064.56740.98530.92070.95780.9514
AQI 0.74550.85830.92140.92441.2170.97331.30211.16310.98521.0939
SGI 1.12851.01131.10711.05430.96760.77360.87250.9661.02151.009
DEPI 1.05430.97961.04310.83931.17221.03750.8750.99051.01320.95
SGAI 14.68330.06931.221612.04671.00920.07421.05981.04731.01820.9454
LVGI 1.32030.85881.15771.31761.10060.89520.90231.16281.12391.1718
TATA -0.1478-0.128-0.1192-0.1133-0.1431-0.1053-0.1105-0.0843-0.1084-0.0895
M-score -6.07-0.99-3.01-5.51-3.020.05-3.39-2.96-3.02-2.97

Brinker International, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.80880.83791.07331.01691.20550.89930.95630.95380.93571.0778
GMI 0.93880.96180.97730.95780.95090.9540.94410.95140.96680.9691
AQI 1.06491.05531.05780.98520.97971.01081.00811.09391.09111.0852
SGI 0.98511.00061.00821.02151.0221.02111.01231.0091.00381.0061
DEPI 0.99690.9991.00891.01320.99930.98150.95420.950.94980.9619
SGAI 1.0881.07791.07441.01751.02791.02870.97370.9460.9030.8976
LVGI 1.21531.1261.12161.12391.11841.12431.11.17181.14731.1159
TATA -0.1112-0.1123-0.1137-0.1084-0.1072-0.1111-0.0907-0.0895-0.1053-0.0951
M-score -3.28-3.21-2.98-3.02-2.85-3.14-2.99-2.97-3.05-2.85
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