Restaurant Brands International (TSX:QSR) Beneish M-Score : -2.32 (As of Apr. 26, 2024)

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What is Restaurant Brands International Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.32 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Restaurant Brands International's Beneish M-Score or its related term are showing as below:

TSX:QSR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.04 Med: -2.5 Max: -0.26
Current: -2.32

During the past 12 years, the highest Beneish M-Score of Restaurant Brands International was -0.26. The lowest was -3.04. And the median was -2.50.

Restaurant Brands International Beneish M-Score Historical Data

The historical data trend for Restaurant Brands International's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Restaurant Brands International Beneish M-Score Chart

Restaurant Brands International Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.20

-2.50

-2.64

-2.39

-2.32

Restaurant Brands International Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.39	-2.41	-2.33	-2.39	-2.32

Competitive Comparison of Restaurant Brands International's Beneish M-Score

For the Restaurants subindustry, Restaurant Brands International's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Restaurant Brands International's Beneish M-Score Distribution in the Restaurants Industry

For the Restaurants industry and Consumer Cyclical sector, Restaurant Brands International's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Restaurant Brands International's Beneish M-Score falls into.

Restaurant Brands International Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Restaurant Brands International for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0864

0.528 * 1.0003

0.404 * 0.9987

0.892 * 1.1089

0.115 * 0.9693

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0664

4.679 * -0.001206

0.327 * 0.9765

-2.32

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was C$1,005 Mil.
Revenue was 2441.712 + 2485.645 + 2358.265 + 2175.597 = C$9,461 Mil.
Gross Profit was 902.897 + 1031.062 + 957.921 + 883.922 = C$3,776 Mil.
Total Current Assets was C$2,915 Mil.
Total Assets was C$31,381 Mil.
Property, Plant and Equipment(Net PPE) was C$4,124 Mil.
Depreciation, Depletion and Amortization(DDA) was C$257 Mil.
Selling, General, & Admin. Expense(SGA) was C$872 Mil.
Total Current Liabilities was C$2,876 Mil.
Long-Term Debt & Capital Lease Obligation was C$19,141 Mil.
Net Income was 681.533 + 340.981 + 320.193 + 258.609 = C$1,601 Mil.
Non Operating Income was -32.198 + -47.358 + -6.643 + -51.995 = C$-138 Mil.
Cash Flow from Operations was 540.665 + 585.892 + 520.811 + 129.988 = C$1,777 Mil.

Total Receivables was C$834 Mil.
Revenue was 2294.506 + 2302.311 + 2098.576 + 1836.966 = C$8,532 Mil.
Gross Profit was 881.666 + 931.062 + 859.148 + 734.28 = C$3,406 Mil.
Total Current Assets was C$2,782 Mil.
Total Assets was C$30,900 Mil.
Property, Plant and Equipment(Net PPE) was C$4,119 Mil.
Depreciation, Depletion and Amortization(DDA) was C$249 Mil.
Selling, General, & Admin. Expense(SGA) was C$737 Mil.
Total Current Liabilities was C$2,875 Mil.
Long-Term Debt & Capital Lease Obligation was C$19,327 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(1004.858 / 9461.219)	/	(834.119 / 8532.359)
	=	0.106208	/	0.097759
	=	1.0864

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)
	=	(3406.156 / 8532.359)	/	(3775.802 / 9461.219)
	=	0.399204	/	0.399082
	=	1.0003

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (2915.297 + 4124.078) / 31381.366)	/	(1 - (2782.208 + 4118.972) / 30900.441)
	=	0.775683	/	0.776664
	=	0.9987

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	9461.219	/	8532.359
	=	1.1089

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(248.701 / (248.701 + 4118.972))	/	(257.377 / (257.377 + 4124.078))
	=	0.056941	/	0.058742
	=	0.9693

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(871.769 / 9461.219)	/	(737.253 / 8532.359)
	=	0.092141	/	0.086407
	=	1.0664

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((19140.607 + 2876.39) / 31381.366)	/	((19327.379 + 2874.586) / 30900.441)
	=	0.701595	/	0.7185
	=	0.9765

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
	=	(1601.316 - -138.194	-	1777.356)	/	31381.366
	=	-0.001206

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Restaurant Brands International has a M-score of -2.32 suggests that the company is unlikely to be a manipulator.

Restaurant Brands International Beneish M-Score Related Terms

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Restaurant Brands International (TSX:QSR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Restaurant Brands International Inc (TSX:QSR) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

QSR:USA QSR:Mexico 0R6:Germany

Address

130 King Street West, Suite 300, P.O. Box 339, Toronto, ON, CAN, M5X 1E1

Website

https://www.rbi.com

Restaurant Brands International is one of the largest restaurant companies in the world, with approximately $39 billion in 2022 systemwide sales across a footprint that spanned nearly 30,000 restaurants and more than 100 countries. The firm generates revenue primarily from retail sales at its company-owned restaurants, royalty fees and lease income from franchised stores, and from its Tim Hortons supply chain operations. Formed in 2014 after 3G Capital's acquisition of Tim Hortons International, the Restaurant Brands portfolio now includes Burger King (19,000 units), Tim Hortons (5,600 units), Popeyes Louisiana Kitchen (4,100 units) and Firehouse Subs (1,250 units) as of year-end 2022.