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Brinker International Inc (NYSE:EAT)
Beneish M-Score
-3.08 (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 -3.08 suggests that the company is not a manipulator.

EAT' s Beneish M-Score Range Over the Past 10 Years
Min: -6.16   Max: -0.89
Current: -3.08

-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 -3.06.


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 * 0.8693+0.528 * 1.043+0.404 * 1.1379+0.892 * 1.085+0.115 * 0.9464
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8812+4.679 * -0.1327-0.327 * 1.0852
=-3.08

* 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 $44 Mil.
Revenue was 881.681 + 824.639 + 788.61 + 762.559 = $3,257 Mil.
Gross Profit was 182.496 + 159.36 + 146.555 + 130.206 = $619 Mil.
Total Current Assets was $177 Mil.
Total Assets was $1,473 Mil.
Property, Plant and Equipment(Net PPE) was $1,043 Mil.
Depreciation, Depletion and Amortization(DDA) was $156 Mil.
Selling, General & Admin. Expense(SGA) was $129 Mil.
Total Current Liabilities was $432 Mil.
Long-Term Debt was $1,114 Mil.
Net Income was 62.342 + 57.502 + 47.694 + 33.207 = $201 Mil.
Non Operating Income was 0.375 + 0.277 + 0.56 + 0.273 = $1 Mil.
Cash Flow from Operations was 95.119 + 144.016 + 110.016 + 45.549 = $395 Mil.
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 $187 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.



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)
=(43.944 / 3257.489) / (46.588 / 3002.278)
=0.01349015 / 0.01551755
=0.8693

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)
=(594.675 / 3002.278) / (618.617 / 3257.489)
=0.1980746 / 0.18990609
=1.043

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 - (176.774 + 1043.152) / 1472.716) / (1 - (187.224 + 1032.044) / 1435.873)
=0.17164884 / 0.15085248
=1.1379

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
=3257.489 / 3002.278
=1.085

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))
=(145.242 / (145.242 + 1032.044)) / (156.368 / (156.368 + 1043.152))
=0.12337019 / 0.13035881
=0.9464

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)
=(128.738 / 3257.489) / (134.649 / 3002.278)
=0.03952062 / 0.04484894
=0.8812

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)
=((1113.949 + 432.443) / 1472.716) / ((970.825 + 418.475) / 1435.873)
=1.0500273 / 0.96756468
=1.0852

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
=(200.745 - 1.485 - 394.7) / 1472.716
=-0.1327

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 -3.08 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

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.89991.08431.22361.0450.98120.99271.00571.06320.94350.8693
GMI 0.24261.0064.56740.98530.92070.95780.95260.98550.9711.043
AQI 0.92441.2170.97331.30211.16310.98521.09390.99731.0071.1379
SGI 1.05430.96760.77360.87250.9661.02151.01031.0211.03191.085
DEPI 0.83931.17221.03750.8750.99051.01320.950.98710.92490.9464
SGAI 12.04671.00920.07421.05981.04731.05120.91450.96130.97210.896
LVGI 1.31761.10060.89520.90231.16281.12391.17291.08021.11081.0852
TATA -0.1122-0.1431-0.1053-0.1105-0.0843-0.1084-0.0895-0.1396-0.1212-0.1327
M-score -5.50-3.02-0.90-2.95-2.96-3.05-2.92-3.09-3.12-3.08

Brinker International Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.11491.06321.2651.11030.9530.94350.91870.83710.90330.8693
GMI 0.97660.98550.9850.9760.98020.9710.97780.9961.02841.043
AQI 1.07880.99731.01230.9740.97331.0071.15411.14131.10131.1379
SGI 1.01371.0211.02981.03711.03981.03191.04021.04251.04731.085
DEPI 0.98670.98710.97710.96250.93930.92490.96530.95690.94980.9464
SGAI 0.88310.96130.96040.9750.99030.97210.98080.95810.91010.8812
LVGI 1.15171.08021.07451.0991.09581.11081.10771.11511.15041.0852
TATA -0.1213-0.1396-0.149-0.1408-0.1332-0.1212-0.0955-0.1012-0.1338-0.1327
M-score -2.94-3.09-2.93-3.06-3.17-3.12-2.95-3.05-3.14-3.08
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