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Eldorado Gold Corp (NYSE:EGO)
Beneish M-Score
-3.59 (As of Today)

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 -3.59 suggests that the company is not a manipulator.

EGO' s 10-Year Beneish M-Score Range
Min: -7.5   Max: 6.82
Current: -3.59

-7.5
6.82

During the past 13 years, the highest Beneish M-Score of Eldorado Gold Corp was 6.82. The lowest was -7.50. And the median was -2.18.


Definition

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 * 0.5771+0.528 * 1.2091+0.404 * 0.7115+0.892 * 0.9795+0.115 * 0.7426
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9821+4.679 * -0.1369-0.327 * 1.089
=-3.59

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $49 Mil.
Revenue was 231.741 + 287.254 + 266.929 + 338.068 = $1,124 Mil.
Gross Profit was 80.844 + 126.04 + 105.322 + 170.586 = $483 Mil.
Total Current Assets was $962 Mil.
Total Assets was $7,235 Mil.
Property, Plant and Equipment(Net PPE) was $5,684 Mil.
Depreciation, Depletion and Amortization(DDA) was $149 Mil.
Selling, General & Admin. Expense(SGA) was $90 Mil.
Total Current Liabilities was $228 Mil.
Long-Term Debt was $585 Mil.
Net Income was -687.55 + 36.41 + 43.274 + -45.463 = $-653 Mil.
Non Operating Income was -9.184 + -11.831 + 2.589 + -0.611 = $-19 Mil.
Cash Flow from Operations was 47.566 + 120.261 + 21.454 + 167.092 = $356 Mil.
Accounts Receivable was $87 Mil.
Revenue was 349.962 + 281.839 + 244.191 + 271.549 = $1,148 Mil.
Gross Profit was 180.462 + 148.142 + 114.487 + 152.902 = $596 Mil.
Total Current Assets was $1,152 Mil.
Total Assets was $7,928 Mil.
Property, Plant and Equipment(Net PPE) was $5,869 Mil.
Depreciation, Depletion and Amortization(DDA) was $114 Mil.
Selling, General & Admin. Expense(SGA) was $94 Mil.
Total Current Liabilities was $235 Mil.
Long-Term Debt was $583 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(49.198 / 1123.992) / (87.044 / 1147.541)
=0.04377077 / 0.07585263
=0.5771

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(126.04 / 1147.541) / (80.844 / 1123.992)
=0.51936532 / 0.42953331
=1.2091

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (961.804 + 5684.382) / 7235.242) / (1 - (1152.162 + 5868.742) / 7928.129)
=0.08141483 / 0.11443116
=0.7115

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1123.992 / 1147.541
=0.9795

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))
=(113.529 / (113.529 + 5868.742)) / (149.068 / (149.068 + 5684.382))
=0.01897758 / 0.025554
=0.7426

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)
=(90.261 / 1123.992) / (93.829 / 1147.541)
=0.08030395 / 0.08176527
=0.9821

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)
=((585.006 + 227.808) / 7235.242) / ((582.974 + 234.908) / 7928.129)
=0.11234096 / 0.10316204
=1.089

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-653.329 - -19.037 - 356.373) / 7235.242
=-0.1369

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 -3.59 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Eldorado Gold Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 2.88391.00881.36690.45540.82310.58860.350.71074.13560.5771
GMI 4.2476-2.057-0.1020.7460.9031.15411.15320.88931.0891.204
AQI 0.586934.05470.62350.1550.517811.68761.06010.94461.06030.7115
SGI 0.93940.9412.50582.22811.52751.24372.20711.39511.03970.9795
DEPI 2.10071.33827.91250.11181.34572.5370.38660.92632.17160.7426
SGAI 1.45131.71580.50840.6320.93570.68290.88280.91661.11350.9821
LVGI 0.63718.4790.87470.91020.27062.11620.82610.7431.63821.089
TATA -0.0146-0.06350.0445-0.0638-0.0135-0.0268-0.0257-0.0490.0014-0.1371
M-score 0.856.39-0.40-2.67-2.191.50-2.01-2.610.42-3.59

Eldorado Gold Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.77340.71071.21951.24491.32344.13561.53521.60641.58890.5771
GMI 0.89220.88030.87190.93351.04371.10751.15351.15391.14761.2091
AQI 1.0620.94460.87960.8690.93171.06031.13391.16161.06760.7115
SGI 1.40031.39511.39481.31181.08911.03971.05011.07761.1270.9795
DEPI 0.85210.92632.02492.11092.23222.17160.9770.87050.75790.7426
SGAI 1.13950.91190.74680.811.00971.11351.14671.0210.86350.9821
LVGI 0.80310.7430.51130.52610.59821.63822.44962.58622.41521.089
TATA -0.0436-0.0487-0.0208-0.0075-0.00520.0014-0.0232-0.0317-0.0338-0.1369
M-score -2.54-2.62-1.82-1.78-1.860.43-2.42-2.39-2.34-3.59
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