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Eldorado Gold Corp (NYSE:EGO)
Beneish M-Score
-2.46 (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 -2.54 suggests that the company is not a manipulator.

EGO' s 10-Year Beneish M-Score Range
Min: -7.36   Max: 6.8
Current: -2.46

-7.36
6.8

During the past 13 years, the highest Beneish M-Score of Eldorado Gold Corp was 6.80. The lowest was -7.36. And the median was -2.34.


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 * 0.9674+0.528 * 1.2697+0.404 * 0.9682+0.892 * 0.9501+0.115 * 0.8854
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0331+4.679 * -0.0233-0.327 * 0.949
=-2.54

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $20 Mil.
Revenue was 259.022 + 263.51 + 265.497 + 279.87 = $1,068 Mil.
Gross Profit was 77.443 + 93.089 + 98.878 + 99.513 = $369 Mil.
Total Current Assets was $847 Mil.
Total Assets was $7,394 Mil.
Property, Plant and Equipment(Net PPE) was $5,964 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General & Admin. Expense(SGA) was $89 Mil.
Total Current Liabilities was $201 Mil.
Long-Term Debt was $587 Mil.
Net Income was 13.916 + 19.791 + 37.632 + 31.268 = $103 Mil.
Non Operating Income was -11.223 + 4.388 + 0.681 + -2.246 = $-8 Mil.
Cash Flow from Operations was 58.886 + 92.189 + 62.833 + 69.437 = $283 Mil.
Accounts Receivable was $22 Mil.
Revenue was 231.741 + 287.254 + 266.929 + 338.068 = $1,124 Mil.
Gross Profit was 80.844 + 126.04 + 115.562 + 170.586 = $493 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.



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)
=(19.771 / 1067.899) / (21.51 / 1123.992)
=0.01851392 / 0.01913715
=0.9674

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)
=(93.089 / 1123.992) / (77.443 / 1067.899)
=0.43864369 / 0.34546619
=1.2697

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 - (847.234 + 5963.611) / 7393.64) / (1 - (961.804 + 5684.382) / 7235.242)
=0.07882383 / 0.08141483
=0.9682

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
=1067.899 / 1123.992
=0.9501

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))
=(149.068 / (149.068 + 5684.382)) / (177.227 / (177.227 + 5963.611))
=0.025554 / 0.02886039
=0.8854

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)
=(88.591 / 1067.899) / (90.261 / 1123.992)
=0.08295822 / 0.08030395
=1.0331

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)
=((587.201 + 201.055) / 7393.64) / ((585.006 + 227.808) / 7235.242)
=0.10661271 / 0.11234096
=0.949

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
=(102.607 - -8.4 - 283.345) / 7393.64
=-0.0233

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 -2.54 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00881.36690.45540.82310.58860.1240.69747.26420.41320.9674
GMI -2.057-0.1020.7460.9031.15411.15320.88931.0891.2041.2697
AQI 34.05470.62350.1550.517811.68761.06010.94461.06030.71150.9682
SGI 0.9412.50582.22811.52751.24372.20711.39511.03970.97950.9501
DEPI 1.33827.91250.11181.34572.5370.38660.92632.17160.74260.8854
SGAI 1.71580.50840.6320.93570.68290.88280.91661.11350.98211.0331
LVGI 8.4790.87470.91020.27062.11620.82610.7431.63821.0890.949
TATA -0.06350.0445-0.0638-0.0135-0.0268-0.0257-0.0490.0014-0.1362-0.0236
M-score 6.39-0.40-2.67-2.191.50-2.22-2.633.30-3.74-2.54

Eldorado Gold Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.32347.26421.53521.60641.58890.41321.09860.91170.9750.9674
GMI 1.03531.09941.14561.13461.12781.1841.27671.30541.33341.2697
AQI 0.93171.06031.13391.16161.06760.71150.69830.71030.73390.9682
SGI 1.08911.03971.05011.07761.1270.97950.87790.86060.83770.9501
DEPI 2.23222.17160.9770.87050.75790.74260.76370.77910.86630.8854
SGAI 1.00971.11351.14671.0210.86350.98211.06051.13791.24261.0331
LVGI 0.59821.63822.44962.58622.41521.0891.0471.05981.04360.949
TATA -0.00520.0014-0.0233-0.0319-0.034-0.136-0.1108-0.1165-0.1165-0.0233
M-score -1.863.31-2.42-2.40-2.36-3.75-3.05-3.26-3.20-2.54
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