Following bankruptcy filings by Sbarro, Perkins and Marie Callender’s this year, new data suggests that other popular restaurant chains are in danger of following suit.
TheStreet.com recently looked at restaurants based on their Altman Z-Score. The website says the score is based on “several aspects of a company's financial health -- including working capital, total assets, total liabilities, market capitalization, sales, retained earnings and earnings before interest & taxes (EBIT) -- to forecast the probability of it going bankrupt within two years.”
Since it began the scoring system in 1968, TheStreet says the formula has been 72 percent accurate in predicting corporate bankruptcies two years prior to the filing.
The list of restaurant in order of most at risk to file for bankruptcy (limited to those with a market capitalization of $100 million):
3. Morton’s Restaurant Group
4. DineEquity (IHOP, Applebee’s)
5. Domino’s Pizza
6. Bravo Brio Restaurant Group
7. McCormick & Schmick’s
8. Ruth’s Hospitality Group (Ruth’s Chris Steak House, Mitchell’s Fish Market)
10. Einstein Noah Restaurant Group
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