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Brinker International Inc (NYSE:EAT)
Beneish M-Score
-3.06 (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 -3.06 suggests that the company is not a manipulator.

EAT' s 10-Year Beneish M-Score Range
Min: -6.27   Max: 2.43
Current: -3.06

-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 -3.02.


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 * 1.1097+0.528 * 0.9766+0.404 * 0.974+0.892 * 1.0377+0.115 * 0.9625
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9698+4.679 * -0.1408-0.327 * 1.099
=-3.06

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $101 Mil.
Revenue was 742.898 + 711.018 + 758.725 + 758.408 = $2,971 Mil.
Gross Profit was 142.505 + 123.419 + 155.043 + 157.505 = $578 Mil.
Total Current Assets was $285 Mil.
Total Assets was $1,550 Mil.
Property, Plant and Equipment(Net PPE) was $1,045 Mil.
Depreciation, Depletion and Amortization(DDA) was $141 Mil.
Selling, General & Admin. Expense(SGA) was $138 Mil.
Total Current Liabilities was $511 Mil.
Long-Term Debt was $901 Mil.
Net Income was 41.306 + 32.738 + 28.82 + 56.263 = $159 Mil.
Non Operating Income was 0.611 + 0.503 + 0.478 + 0.693 = $2 Mil.
Cash Flow from Operations was 91.567 + 70.898 + 82.742 + 129.779 = $375 Mil.
Accounts Receivable was $87 Mil.
Revenue was 705.662 + 684.66 + 730.068 + 742.759 = $2,863 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 $137 Mil.
Total Current Liabilities was $429 Mil.
Long-Term Debt was $806 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)
=(100.501 / 2971.049) / (87.277 / 2863.149)
=0.03382677 / 0.03048287
=1.1097

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)
=(123.419 / 2863.149) / (142.505 / 2971.049)
=0.19014449 / 0.19470295
=0.9766

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 - (285.453 + 1045.447) / 1549.831) / (1 - (247.141 + 1026.402) / 1489.568)
=0.14126121 / 0.14502527
=0.974

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
=2971.049 / 2863.149
=1.0377

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))
=(132.567 / (132.567 + 1026.402)) / (141.001 / (141.001 + 1045.447))
=0.11438356 / 0.11884297
=0.9625

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)
=(137.765 / 2971.049) / (136.89 / 2863.149)
=0.04636914 / 0.04781099
=0.9698

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)
=((901.241 + 511.109) / 1549.831) / ((806.215 + 428.955) / 1489.568)
=0.91129291 / 0.82921357
=1.099

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
=(159.127 - 2.285 - 374.986) / 1549.831
=-0.1408

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 -3.06 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.01930.89930.95631.0070.84621.0771.11661.06261.26421.1097
GMI 0.95090.9540.94410.95140.9670.96980.97510.9860.98560.9766
AQI 0.97971.01081.00811.09391.09111.08521.07880.99731.01230.974
SGI 1.0221.02111.01231.0091.0041.00681.01211.02161.03041.0377
DEPI 0.99930.98150.95420.950.94980.96190.98670.98710.97710.9625
SGAI 1.02791.02870.97370.97120.92730.92140.94350.95690.95570.9698
LVGI 1.11841.12431.11.17291.14731.11591.15171.08021.07451.099
TATA -0.1072-0.1111-0.0907-0.0895-0.1053-0.0951-0.1213-0.1396-0.149-0.1408
M-score -3.02-3.14-2.99-2.93-3.13-2.86-2.95-3.09-2.93-3.06
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