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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.
During the past 13 years, the highest Beneish M-Score of Eldorado Gold Corp was 15.34. The lowest was -15.04. And the median was -2.55.
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 * 0.7503||+||0.528 * 1.3437||+||0.404 * 0.2172||+||0.892 * 0.7703||+||0.115 * 0.6726|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2787||+||4.679 * -0.3396||-||0.327 * 1.6432|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $49.4 Mil.|
Revenue was 107.063 + 164.132 + 199.28 + 211.516 = $682.0 Mil.
Gross Profit was 41.633 + 38.179 + 29.329 + 47.985 = $157.1 Mil.
Total Current Assets was $1,559.0 Mil.
Total Assets was $5,151.7 Mil.
Property, Plant and Equipment(Net PPE) was $3,498.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $141.9 Mil.
Selling, General & Admin. Expense(SGA) was $77.8 Mil.
Total Current Liabilities was $381.4 Mil.
Long-Term Debt was $590.5 Mil.
Net Income was -329.864 + -2.478 + -1237.96 + -96.091 = $-1,666.4 Mil.
Non Operating Income was 0.451 + -6.841 + -8.847 + 0.768 = $-14.5 Mil.
Cash Flow from Operations was 2.486 + 2.441 + 40.259 + 52.563 = $97.7 Mil.
|Accounts Receivable was $85.4 Mil.
Revenue was 124.561 + 238.311 + 259.022 + 263.51 = $885.4 Mil.
Gross Profit was 36.182 + 67.387 + 77.443 + 93.089 = $274.1 Mil.
Total Current Assets was $765.4 Mil.
Total Assets was $7,145.2 Mil.
Property, Plant and Equipment(Net PPE) was $5,777.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $155.6 Mil.
Selling, General & Admin. Expense(SGA) was $79.0 Mil.
Total Current Liabilities was $232.0 Mil.
Long-Term Debt was $588.3 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)|
|=||(49.367 / 681.991)||/||(85.421 / 885.404)|
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)|
|=||(274.101 / 885.404)||/||(157.126 / 681.991)|
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 - (1558.965 + 3498.434) / 5151.724)||/||(1 - (765.385 + 5777.422) / 7145.234)|
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))|
|=||(155.555 / (155.555 + 5777.422))||/||(141.913 / (141.913 + 3498.434))|
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)|
|=||(77.845 / 681.991)||/||(79.038 / 885.404)|
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)|
|=||((590.492 + 381.361) / 5151.724)||/||((588.298 + 231.987) / 7145.234)|
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|
|=||(-1666.393 - -14.469||-||97.749)||/||5151.724|
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 -4.93 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