Intrinsic value of Eldorado Gold Corporation - ELD

Previous Close

$1.59

  Intrinsic Value

$1.49

stock screener

  Rating & Target

hold

-6%

Previous close

$1.59

 
Intrinsic value

$1.49

 
Up/down potential

-6%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ELD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -9.58
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  585
  597
  610
  626
  644
  663
  685
  708
  733
  760
  790
  821
  854
  890
  927
  967
  1,010
  1,055
  1,102
  1,152
  1,205
  1,261
  1,320
  1,382
  1,447
  1,516
  1,589
  1,665
  1,746
  1,830
  1,919
Variable operating expenses, $m
 
  2,880
  2,946
  3,022
  3,107
  3,201
  3,304
  3,417
  3,538
  3,670
  3,811
  3,961
  4,122
  4,293
  4,475
  4,668
  4,873
  5,089
  5,318
  5,560
  5,816
  6,085
  6,370
  6,669
  6,985
  7,317
  7,668
  8,036
  8,424
  8,832
  9,261
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  494
  2,880
  2,946
  3,022
  3,107
  3,201
  3,304
  3,417
  3,538
  3,670
  3,811
  3,961
  4,122
  4,293
  4,475
  4,668
  4,873
  5,089
  5,318
  5,560
  5,816
  6,085
  6,370
  6,669
  6,985
  7,317
  7,668
  8,036
  8,424
  8,832
  9,261
Operating income, $m
  91
  -2,283
  -2,335
  -2,396
  -2,463
  -2,538
  -2,619
  -2,709
  -2,805
  -2,909
  -3,021
  -3,140
  -3,268
  -3,404
  -3,548
  -3,701
  -3,863
  -4,035
  -4,216
  -4,408
  -4,611
  -4,824
  -5,050
  -5,287
  -5,538
  -5,801
  -6,079
  -6,371
  -6,678
  -7,002
  -7,342
EBITDA, $m
  192
  -2,090
  -2,138
  -2,193
  -2,255
  -2,323
  -2,398
  -2,480
  -2,569
  -2,664
  -2,766
  -2,875
  -2,992
  -3,116
  -3,248
  -3,388
  -3,537
  -3,694
  -3,860
  -4,036
  -4,221
  -4,417
  -4,624
  -4,841
  -5,070
  -5,312
  -5,566
  -5,833
  -6,115
  -6,411
  -6,722
Interest expense (income), $m
  46
  46
  48
  50
  53
  56
  60
  63
  68
  72
  77
  82
  87
  93
  99
  106
  113
  121
  128
  137
  146
  155
  165
  175
  186
  197
  209
  222
  236
  250
  265
Earnings before tax, $m
  66
  -2,329
  -2,384
  -2,446
  -2,516
  -2,594
  -2,679
  -2,772
  -2,873
  -2,981
  -3,098
  -3,222
  -3,355
  -3,497
  -3,647
  -3,807
  -3,976
  -4,155
  -4,345
  -4,545
  -4,756
  -4,979
  -5,214
  -5,462
  -5,723
  -5,999
  -6,288
  -6,593
  -6,914
  -7,251
  -7,607
Tax expense, $m
  76
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -465
  -2,329
  -2,384
  -2,446
  -2,516
  -2,594
  -2,679
  -2,772
  -2,873
  -2,981
  -3,098
  -3,222
  -3,355
  -3,497
  -3,647
  -3,807
  -3,976
  -4,155
  -4,345
  -4,545
  -4,756
  -4,979
  -5,214
  -5,462
  -5,723
  -5,999
  -6,288
  -6,593
  -6,914
  -7,251
  -7,607

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,239
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,482
  5,328
  5,450
  5,590
  5,748
  5,922
  6,113
  6,321
  6,547
  6,789
  7,050
  7,329
  7,626
  7,943
  8,279
  8,636
  9,015
  9,416
  9,839
  10,287
  10,760
  11,258
  11,784
  12,339
  12,923
  13,538
  14,186
  14,867
  15,585
  16,340
  17,134
Adjusted assets (=assets-cash), $m
  5,243
  5,328
  5,450
  5,590
  5,748
  5,922
  6,113
  6,321
  6,547
  6,789
  7,050
  7,329
  7,626
  7,943
  8,279
  8,636
  9,015
  9,416
  9,839
  10,287
  10,760
  11,258
  11,784
  12,339
  12,923
  13,538
  14,186
  14,867
  15,585
  16,340
  17,134
Revenue / Adjusted assets
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
Average production assets, $m
  5,667
  5,780
  5,913
  6,065
  6,236
  6,425
  6,632
  6,858
  7,103
  7,366
  7,649
  7,951
  8,274
  8,617
  8,983
  9,370
  9,781
  10,215
  10,675
  11,161
  11,673
  12,215
  12,785
  13,387
  14,020
  14,688
  15,391
  16,130
  16,909
  17,728
  18,589
Working capital, $m
  1,353
  116
  119
  122
  126
  129
  134
  138
  143
  148
  154
  160
  167
  173
  181
  189
  197
  206
  215
  225
  235
  246
  257
  269
  282
  296
  310
  325
  340
  357
  374
Total debt, $m
  799
  828
  870
  917
  970
  1,029
  1,094
  1,165
  1,241
  1,324
  1,412
  1,506
  1,607
  1,715
  1,829
  1,950
  2,078
  2,214
  2,357
  2,509
  2,669
  2,839
  3,017
  3,205
  3,403
  3,611
  3,831
  4,062
  4,305
  4,561
  4,830
Total liabilities, $m
  1,777
  1,806
  1,848
  1,895
  1,948
  2,007
  2,072
  2,143
  2,219
  2,302
  2,390
  2,484
  2,585
  2,693
  2,807
  2,928
  3,056
  3,192
  3,335
  3,487
  3,647
  3,817
  3,995
  4,183
  4,381
  4,589
  4,809
  5,040
  5,283
  5,539
  5,808
Total equity, $m
  4,705
  3,522
  3,603
  3,695
  3,799
  3,914
  4,041
  4,178
  4,327
  4,488
  4,660
  4,844
  5,041
  5,250
  5,473
  5,709
  5,959
  6,224
  6,504
  6,800
  7,112
  7,442
  7,789
  8,156
  8,542
  8,949
  9,377
  9,827
  10,302
  10,801
  11,325
Total liabilities and equity, $m
  6,482
  5,328
  5,451
  5,590
  5,747
  5,921
  6,113
  6,321
  6,546
  6,790
  7,050
  7,328
  7,626
  7,943
  8,280
  8,637
  9,015
  9,416
  9,839
  10,287
  10,759
  11,259
  11,784
  12,339
  12,923
  13,538
  14,186
  14,867
  15,585
  16,340
  17,133
Debt-to-equity ratio
  0.170
  0.240
  0.240
  0.250
  0.260
  0.260
  0.270
  0.280
  0.290
  0.290
  0.300
  0.310
  0.320
  0.330
  0.330
  0.340
  0.350
  0.360
  0.360
  0.370
  0.380
  0.380
  0.390
  0.390
  0.400
  0.400
  0.410
  0.410
  0.420
  0.420
  0.430
Adjusted equity ratio
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -465
  -2,329
  -2,384
  -2,446
  -2,516
  -2,594
  -2,679
  -2,772
  -2,873
  -2,981
  -3,098
  -3,222
  -3,355
  -3,497
  -3,647
  -3,807
  -3,976
  -4,155
  -4,345
  -4,545
  -4,756
  -4,979
  -5,214
  -5,462
  -5,723
  -5,999
  -6,288
  -6,593
  -6,914
  -7,251
  -7,607
Depreciation, amort., depletion, $m
  101
  193
  197
  202
  208
  214
  221
  229
  237
  246
  255
  265
  276
  287
  299
  312
  326
  341
  356
  372
  389
  407
  426
  446
  467
  490
  513
  538
  564
  591
  620
Funds from operations, $m
  194
  -2,137
  -2,186
  -2,244
  -2,308
  -2,380
  -2,458
  -2,544
  -2,636
  -2,736
  -2,843
  -2,957
  -3,079
  -3,210
  -3,348
  -3,495
  -3,650
  -3,815
  -3,989
  -4,173
  -4,367
  -4,572
  -4,788
  -5,016
  -5,256
  -5,509
  -5,775
  -6,055
  -6,350
  -6,661
  -6,987
Change in working capital, $m
  40
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  16
  17
Cash from operations, $m
  154
  -2,139
  -2,189
  -2,247
  -2,312
  -2,383
  -2,462
  -2,548
  -2,641
  -2,741
  -2,848
  -2,963
  -3,086
  -3,216
  -3,355
  -3,502
  -3,658
  -3,823
  -3,998
  -4,183
  -4,377
  -4,583
  -4,800
  -5,028
  -5,269
  -5,522
  -5,789
  -6,070
  -6,366
  -6,677
  -7,004
Maintenance CAPEX, $m
  0
  -189
  -193
  -197
  -202
  -208
  -214
  -221
  -229
  -237
  -246
  -255
  -265
  -276
  -287
  -299
  -312
  -326
  -341
  -356
  -372
  -389
  -407
  -426
  -446
  -467
  -490
  -513
  -538
  -564
  -591
New CAPEX, $m
  -402
  -113
  -133
  -152
  -171
  -189
  -207
  -226
  -244
  -263
  -283
  -302
  -323
  -344
  -365
  -387
  -411
  -435
  -460
  -486
  -513
  -541
  -571
  -601
  -634
  -667
  -703
  -740
  -778
  -819
  -861
Cash from investing activities, $m
  650
  -302
  -326
  -349
  -373
  -397
  -421
  -447
  -473
  -500
  -529
  -557
  -588
  -620
  -652
  -686
  -723
  -761
  -801
  -842
  -885
  -930
  -978
  -1,027
  -1,080
  -1,134
  -1,193
  -1,253
  -1,316
  -1,383
  -1,452
Free cash flow, $m
  804
  -2,441
  -2,515
  -2,596
  -2,684
  -2,780
  -2,884
  -2,995
  -3,114
  -3,241
  -3,377
  -3,521
  -3,674
  -3,836
  -4,008
  -4,189
  -4,381
  -4,584
  -4,798
  -5,024
  -5,262
  -5,513
  -5,777
  -6,056
  -6,349
  -6,657
  -6,982
  -7,323
  -7,682
  -8,060
  -8,456
Issuance/(repayment) of debt, $m
  0
  29
  42
  47
  53
  59
  65
  71
  76
  82
  88
  94
  101
  107
  114
  121
  128
  136
  144
  152
  160
  169
  178
  188
  198
  209
  220
  231
  243
  256
  269
Issuance/(repurchase) of shares, $m
  0
  2,385
  2,465
  2,539
  2,620
  2,709
  2,806
  2,910
  3,022
  3,142
  3,270
  3,407
  3,552
  3,706
  3,870
  4,043
  4,226
  4,420
  4,625
  4,841
  5,069
  5,309
  5,562
  5,829
  6,110
  6,405
  6,716
  7,044
  7,388
  7,750
  8,131
Cash from financing (excl. dividends), $m  
  0
  2,414
  2,507
  2,586
  2,673
  2,768
  2,871
  2,981
  3,098
  3,224
  3,358
  3,501
  3,653
  3,813
  3,984
  4,164
  4,354
  4,556
  4,769
  4,993
  5,229
  5,478
  5,740
  6,017
  6,308
  6,614
  6,936
  7,275
  7,631
  8,006
  8,400
Total cash flow (excl. dividends), $m
  804
  -27
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
Retained Cash Flow (-), $m
  364
  -2,385
  -2,465
  -2,539
  -2,620
  -2,709
  -2,806
  -2,910
  -3,022
  -3,142
  -3,270
  -3,407
  -3,552
  -3,706
  -3,870
  -4,043
  -4,226
  -4,420
  -4,625
  -4,841
  -5,069
  -5,309
  -5,562
  -5,829
  -6,110
  -6,405
  -6,716
  -7,044
  -7,388
  -7,750
  -8,131
Prev. year cash balance distribution, $m
 
  1,239
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,173
  -2,465
  -2,539
  -2,620
  -2,709
  -2,806
  -2,910
  -3,022
  -3,142
  -3,270
  -3,407
  -3,552
  -3,706
  -3,870
  -4,043
  -4,226
  -4,420
  -4,625
  -4,841
  -5,069
  -5,309
  -5,562
  -5,829
  -6,110
  -6,405
  -6,716
  -7,044
  -7,388
  -7,750
  -8,131
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -1,125
  -2,256
  -2,209
  -2,157
  -2,100
  -2,036
  -1,966
  -1,889
  -1,805
  -1,714
  -1,618
  -1,516
  -1,409
  -1,299
  -1,187
  -1,074
  -962
  -852
  -745
  -644
  -549
  -461
  -382
  -311
  -249
  -196
  -151
  -114
  -85
  -61
Current shareholders' claim on cash, %
  100
  50.4
  25.2
  12.6
  6.2
  3.1
  1.5
  0.8
  0.4
  0.2
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Eldorado Gold Corp is a Canada-based gold exploration, development and mining company. The Company's geographical segments include Turkey, Brazil, Greece, Romania and Other. The Turkey segment includes the Kisladag and the Efemcukuru mines and exploration activities in Turkey. The Brazil segment includes the Vila Nova mine, the Tocantinzinho project and exploration activities in Brazil. The Greece segment includes the Stratoni mine, the Olympias, Skouries, Perama Hill and Sapes projects, and exploration activities in Greece. The Romania segment includes the Certej project and exploration activities in Romania. The Other segment includes operations of the Company's corporate office and exploration activities in other countries. The Company has operations and ongoing exploration and development projects in Turkey, Greece, Brazil and Romania. Its Operating gold mines include the Kisladag and Efemcukuru mines in Turkey.

FINANCIAL RATIOS  of  Eldorado Gold Corporation (ELD)

Valuation Ratios
P/E Ratio -2.5
Price to Sales 1.9
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 7.4
Price to Free Cash Flow -4.6
Growth Rates
Sales Growth Rate -9.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.3%
Cap. Spend. - 3 Yr. Gr. Rate -9.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 17%
Total Debt to Equity 17%
Interest Coverage 2
Management Effectiveness
Return On Assets -6.8%
Ret/ On Assets - 3 Yr. Avg. -9.6%
Return On Total Capital -8.2%
Ret/ On T. Cap. - 3 Yr. Avg. -12.2%
Return On Equity -9.5%
Return On Equity - 3 Yr. Avg. -13.9%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 37.6%
Gross Margin - 3 Yr. Avg. 32.8%
EBITDA Margin 36.4%
EBITDA Margin - 3 Yr. Avg. -93.9%
Operating Margin 15.6%
Oper. Margin - 3 Yr. Avg. -114.4%
Pre-Tax Margin 11.3%
Pre-Tax Margin - 3 Yr. Avg. -117.5%
Net Profit Margin -79.5%
Net Profit Margin - 3 Yr. Avg. -130.5%
Effective Tax Rate 115.2%
Eff/ Tax Rate - 3 Yr. Avg. 60.1%
Payout Ratio 0%

ELD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ELD stock intrinsic value calculation we used $585 million for the last fiscal year's total revenue generated by Eldorado Gold Corporation. The default revenue input number comes from 2016 income statement of Eldorado Gold Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ELD stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ELD is calculated based on our internal credit rating of Eldorado Gold Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Eldorado Gold Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ELD stock the variable cost ratio is equal to 482.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ELD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.8% for Eldorado Gold Corporation.

Corporate tax rate of 27% is the nominal tax rate for Eldorado Gold Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ELD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ELD are equal to 968.7%.

Life of production assets of 56.4 years is the average useful life of capital assets used in Eldorado Gold Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ELD is equal to 19.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4705 million for Eldorado Gold Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 791.139 million for Eldorado Gold Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Eldorado Gold Corporation at the current share price and the inputted number of shares is $1.3 billion.

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Financial statements of ELD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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