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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 -3.26 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Eldorado Gold Corp was 17.12. The lowest was -11.71. And the median was -2.48.
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 * 0.9117||+||0.528 * 1.3054||+||0.404 * 0.7103||+||0.892 * 0.8606||+||0.115 * 0.7791|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.1379||+||4.679 * -0.1176||-||0.327 * 1.0598|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $83 Mil.|
Revenue was 265.497 + 279.87 + 231.741 + 287.254 = $1,064 Mil.
Gross Profit was 98.878 + 99.513 + 80.844 + 126.04 = $405 Mil.
Total Current Assets was $906 Mil.
Total Assets was $7,312 Mil.
Property, Plant and Equipment(Net PPE) was $5,807 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $90 Mil.
Total Current Liabilities was $188 Mil.
Long-Term Debt was $586 Mil.
Net Income was 37.632 + 31.268 + -687.55 + 36.41 = $-582 Mil.
Non Operating Income was 0.681 + -2.246 + -9.184 + -11.831 = $-23 Mil.
Cash Flow from Operations was 62.833 + 69.437 + 47.566 + 120.261 = $300 Mil.
|Accounts Receivable was $106 Mil.
Revenue was 266.929 + 338.068 + 349.962 + 281.839 = $1,237 Mil.
Gross Profit was 115.562 + 170.586 + 180.462 + 148.142 = $615 Mil.
Total Current Assets was $1,069 Mil.
Total Assets was $8,001 Mil.
Property, Plant and Equipment(Net PPE) was $6,010 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $92 Mil.
Total Current Liabilities was $215 Mil.
Long-Term Debt was $584 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)|
|=||(82.822 / 1064.362)||/||(105.556 / 1236.798)|
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)|
|=||(99.513 / 1236.798)||/||(98.878 / 1064.362)|
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 - (905.776 + 5806.914) / 7311.566)||/||(1 - (1068.959 + 6009.707) / 8001.399)|
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))|
|=||(133.324 / (133.324 + 6009.707))||/||(166.387 / (166.387 + 5806.914))|
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)|
|=||(90.154 / 1064.362)||/||(92.068 / 1236.798)|
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)|
|=||((586.104 + 188.028) / 7311.566)||/||((583.973 + 215.394) / 8001.399)|
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|
|=||(-582.24 - -22.58||-||300.097)||/||7311.566|
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 -3.26 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