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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.
Eldorado Gold Corp has a M-score of -3.03 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Eldorado Gold Corp was 20.19. The lowest was -11.11. And the median was -2.37.
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 Eldorado Gold Corp 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 * 1.0986||+||0.528 * 1.3085||+||0.404 * 0.6983||+||0.892 * 0.8779||+||0.115 * 0.7637|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0605||+||4.679 * -0.1119||-||0.327 * 1.047|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $90 Mil.|
Revenue was 279.87 + 231.741 + 287.254 + 266.929 = $1,066 Mil.
Gross Profit was 99.513 + 80.844 + 126.04 + 105.322 = $412 Mil.
Total Current Assets was $943 Mil.
Total Assets was $7,282 Mil.
Property, Plant and Equipment(Net PPE) was $5,755 Mil.
Depreciation, Depletion and Amortization(DDA) was $158 Mil.
Selling, General & Admin. Expense(SGA) was $88 Mil.
Total Current Liabilities was $202 Mil.
Long-Term Debt was $586 Mil.
Net Income was 31.268 + -687.55 + 36.41 + 43.274 = $-577 Mil.
Non Operating Income was -2.246 + -9.184 + -11.831 + 2.589 = $-21 Mil.
Cash Flow from Operations was 69.437 + 47.566 + 120.261 + 21.454 = $259 Mil.
|Accounts Receivable was $94 Mil.
Revenue was 338.068 + 349.962 + 281.839 + 244.191 = $1,214 Mil.
Gross Profit was 170.586 + 180.462 + 148.142 + 114.487 = $614 Mil.
Total Current Assets was $1,129 Mil.
Total Assets was $7,979 Mil.
Property, Plant and Equipment(Net PPE) was $5,933 Mil.
Depreciation, Depletion and Amortization(DDA) was $123 Mil.
Selling, General & Admin. Expense(SGA) was $94 Mil.
Total Current Liabilities was $241 Mil.
Long-Term Debt was $583 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(90.248 / 1065.794)||/||(93.579 / 1214.06)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(80.844 / 1214.06)||/||(99.513 / 1065.794)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (942.55 + 5754.756) / 7281.887)||/||(1 - (1128.617 + 5932.883) / 7978.82)|
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.
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))|
|=||(123.235 / (123.235 + 5932.883))||/||(157.526 / (157.526 + 5754.756))|
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)|
|=||(87.51 / 1065.794)||/||(94.001 / 1214.06)|
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)|
|=||((585.555 + 201.709) / 7281.887)||/||((583.32 + 240.555) / 7978.82)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-576.598 - -20.672||-||258.718)||/||7281.887|
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.
Eldorado Gold Corp has a M-score of -3.03 suggests that the company will not be a manipulator.
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
Eldorado Gold Corp Annual Data
Eldorado Gold Corp Quarterly Data