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Brinker International Inc (NYSE:EAT)
Beneish M-Score
-3.09 (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 -3.09 suggests that the company is not a manipulator.

EAT' s 10-Year Beneish M-Score Range
Min: -6.16   Max: -0.89
Current: -3.09

-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 -3.02.


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 * 1.0633+0.528 * 0.9853+0.404 * 0.9973+0.892 * 1.0209+0.115 * 0.9871
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9576+4.679 * -0.1396-0.327 * 1.0802
=-3.09

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $48 Mil.
Revenue was 758.725 + 758.408 + 704.395 + 683.924 = $2,905 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 $137 Mil.
Total Current Liabilities was $466 Mil.
Long-Term Debt was $832 Mil.
Net Income was 28.82 + 56.263 + 39.744 + 29.212 = $154 Mil.
Non Operating Income was 0.478 + 0.693 + 0.461 + 0.582 = $2 Mil.
Cash Flow from Operations was 82.742 + 129.779 + 91.905 + 55.416 = $360 Mil.
Accounts Receivable was $44 Mil.
Revenue was 730.068 + 742.759 + 689.764 + 683.507 = $2,846 Mil.
Gross Profit was 149.312 + 148.084 + 125.805 + 116.893 = $540 Mil.
Total Current Assets was $199 Mil.
Total Assets was $1,453 Mil.
Property, Plant and Equipment(Net PPE) was $1,036 Mil.
Depreciation, Depletion and Amortization(DDA) was $131 Mil.
Selling, General & Admin. Expense(SGA) was $140 Mil.
Total Current Liabilities was $391 Mil.
Long-Term Debt was $780 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)
=(47.85 / 2905.452) / (44.082 / 2846.098)
=0.01646904 / 0.01548857
=1.0633

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)
=(157.505 / 2846.098) / (155.043 / 2905.452)
=0.18976648 / 0.19259103
=0.9853

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 - (210.854 + 1056.454) / 1490.604) / (1 - (198.591 + 1035.815) / 1452.603)
=0.14980236 / 0.15021103
=0.9973

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
=2905.452 / 2846.098
=1.0209

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))
=(131.481 / (131.481 + 1035.815)) / (136.081 / (136.081 + 1056.454))
=0.11263724 / 0.1141107
=0.9871

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)
=(137.254 / 2905.452) / (140.41 / 2846.098)
=0.04724015 / 0.04933421
=0.9576

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)
=((832.302 + 466.11) / 1490.604) / ((780.121 + 391.232) / 1452.603)
=0.87106435 / 0.80638206
=1.0802

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
=(154.039 - 2.214 - 359.842) / 1490.604
=-0.1396

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 -3.09 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.07330.99271.01930.89930.95631.0070.84641.07781.11741.0633
GMI 0.97730.95780.95090.9540.94410.95140.96680.96910.97440.9853
AQI 1.05780.98520.97971.01081.00811.09391.09111.08521.07880.9973
SGI 1.00821.02151.0221.02111.01231.0091.00381.00611.01141.0209
DEPI 1.00891.01320.99930.98150.95420.950.94980.96190.98670.9871
SGAI 1.07441.01751.02791.02870.97370.97120.92760.9220.94410.9576
LVGI 1.12161.12391.11841.12431.11.17291.14731.11591.15171.0802
TATA -0.1137-0.1084-0.1072-0.1111-0.0907-0.0895-0.1053-0.0951-0.1213-0.1396
M-score -2.98-3.05-3.02-3.14-2.99-2.93-3.13-2.86-2.95-3.09
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