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Cheesecake Factory (Cheesecake Factory) Altman Z-Score : 2.27 (As of Jul. 14, 2024)


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What is Cheesecake Factory Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.27 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Cheesecake Factory has a Altman Z-Score of 2.27, indicating it is in Grey Zones. This implies that Cheesecake Factory is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Cheesecake Factory's Altman Z-Score or its related term are showing as below:

CAKE' s Altman Z-Score Range Over the Past 10 Years
Min: 1.22   Med: 2.89   Max: 6.37
Current: 2.27

During the past 13 years, Cheesecake Factory's highest Altman Z-Score was 6.37. The lowest was 1.22. And the median was 2.89.


Cheesecake Factory Altman Z-Score Historical Data

The historical data trend for Cheesecake Factory's Altman Z-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.

* Premium members only.

Cheesecake Factory Altman Z-Score Chart

Cheesecake Factory Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.04 1.22 2.13 2.08 2.21

Cheesecake Factory Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.20 2.22 2.19 2.21 2.25

Competitive Comparison of Cheesecake Factory's Altman Z-Score

For the Restaurants subindustry, Cheesecake Factory's Altman Z-Score, along with its competitors' market caps and Altman Z-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.


Cheesecake Factory's Altman Z-Score Distribution in the Restaurants Industry

For the Restaurants industry and Consumer Cyclical sector, Cheesecake Factory's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Cheesecake Factory's Altman Z-Score falls into.



Cheesecake Factory Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Cheesecake Factory's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*-0.1307+1.4*0.4355+3.3*0.0402+0.6*0.7723+1.0*1.2209
=2.27

* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Mar. 2024:
Total Assets was $2,838 Mil.
Total Current Assets was $284 Mil.
Total Current Liabilities was $655 Mil.
Retained Earnings was $1,236 Mil.
Pre-Tax Income was 37.532 + 5.656 + 17.003 + 45.309 = $106 Mil.
Interest Expense was -1.761 + -2.483 + -2.027 + -2.162 = $-8 Mil.
Revenue was 891.223 + 877.009 + 830.21 + 866.17 = $3,465 Mil.
Market Cap (Today) was $1,935 Mil.
Total Liabilities was $2,505 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(283.572 - 654.501)/2837.64
=-0.1307

X2=Retained Earnings/Total Assets
=1235.666/2837.64
=0.4355

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(105.5 - -8.433)/2837.64
=0.0402

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1934.891/2505.202
=0.7723

X5=Revenue/Total Assets
=3464.612/2837.64
=1.2209

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Cheesecake Factory has a Altman Z-Score of 2.27 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Cheesecake Factory  (NAS:CAKE) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Cheesecake Factory Altman Z-Score Related Terms

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Cheesecake Factory (Cheesecake Factory) Business Description

Traded in Other Exchanges
Address
26901 Malibu Hills Road, Calabasas Hills, CA, USA, 91301
Cheesecake Factory owns and operates restaurants in the United States and Canada under brands that include The Cheesecake Factory, North Italia, and a collection within the Fox Restaurants Concepts subsidiary. The company's international presence, in the Middle East and Mexico, is through licensing agreements with third parties. The company also has a bakery division that produces cheesecakes and other baked products for sale in its restaurants, international licensees, and third-party bakery customers. The company has four operating business segments: The Cheesecake Factory restaurants, North Italia, other FRC, and Flower Child. Majority of the company's revenue comes from The Cheesecake Factory restaurants segment.
Executives
Ashley W Hanscom officer: PRINCIPAL ACCOUNTING OFFICER 26901 MALIBU HILLS ROAD, CALABASAS HILLS CA 91301
Adam S. Gordon director 26901 MALIBU HILLS ROAD, CALABASAS CA 91301
Edie A Ames director C/O MORTONS RESTATURANT GROUP, INC., 325 LASALLE STREET, SUITE 500, CHICAGO IL 60610
David Bruce Pittaway director 150 E 58TH ST, STE 3700, NEW YORK NY 10155
Khanh Collins director 22825 QUEENSBRIDGE DRIVE, ASHBURN VA 20148
Matthew Eliot Clark officer: VP, Strategic Planning 26901 MALIBU HILLS ROAD, CALABASAS HILLS CA 91301
David M Gordon officer: President C/O THE CHEESECAKE FACTORY INCORPORATED, 26901 MALIBU HILLS DRIVE, CALABASAS HILLS CA 91301
Cheryl Slomann officer: Principal Accounting Officer 6450 VIA REAL, CURPINTERIA CA 93013
David Overton director, officer: Chairman and C.E.O.
Keith Carango officer: President (Subsidiary) 26901 MALIBU HILLS ROAD, CALABASAS HILLS CA 91301
Paul D. Ginsberg director C/O ROARK CAPITAL, 1180 PEACHTREE STREET NE, SUITE 2500, ATLANTA GA 30309
Rc Cake Holdings Llc 10 percent owner 1180 PEACHTREE STREET NE, SUITE 2500, ATLANTA GA 30309
Janice L. Meyer director 26901 MALIBU HILLS ROAD, CALABASAS CA 91301
Laurence B Mindel director IL FORNAIO AMERICA CORP, 770 TAMAPAIS DR STE 400, CORTE MADERA CA 94925
Alexander L Cappello director C/O THE CHEESECAKE FACTORY INC, 26901 MALIBU HILLS ROAD, CALABASAS HILLS CA 91301