| Weighing Liquidity against Leverage for Intermediate Gold Miners | |
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A Comparison of Key Intermediate Gold Mining Companies in 2015 (Continued from Prior Part) Financial liquidity
Previously in this series, we analyzed the financial leverage of six intermediate mining companies—Agnico Eagle Mines (AEM), Anglogold Ashanti (AU), Gold Fields (GFI), Tahoe Resources (TAHO), Sibanye Gold (SBGL), and Eldorado Gold Corporation (EGO)—in order to weigh the importance of leverage for gold miners. Financial leverage only analyzes the long-term solvency (more than one year) of a company, whereas financial liquidity checks cash outflow and inflow in the short-term (less than one year) period.
If a company’s cash outflow is more than its cash inflow, it will be short of cash and might have to take drastic measures to improve the liquidity. Analysts use various ratios to judge the financial liquidity of a company. The most widely used ratio is a company’s current ratio, which shows its ability to pay current liabilities using current assets. Current ratio is calculated by current assets divided by current liability. A higher current ratio is better for a company.
Other measurements of financial liquidity ratios include quick ratio, inventory days, payable days, and receivable days. But current ratio is considered the most comprehensive measure for analyzing the liquidity profile of a company.
Current ratio for intermediate gold miners
Below is a breakdown of the six gold mining companies we’ve been evaluating in this series and their current ratios in 2015:
- Eldorado Gold (EGO)—3.3x
- Agnico Eagle (AEM)—2.8x
- Anglogold (AU)—2.1x
- Gold Fields (GFI)—1.7x
- Tahoe Resources (TAHO)—1.6x
- Sibanye Gold (SBGL)—0.6x
Eldorado is the best-placed mining company in terms of short-term liquidity, whereas Sibanye Gold’s current ratio is the poorest-placed, as it is very low.
The SPDR Gold Shares (GLD) and the Market Vectors Gold Miners ETF (GDX) are two notable ETFs in gold industry. Investors can invest in these ETFs to get exposure to gold. Anglogold forms 4.80% of the GDX’s portfolio holdings.
In the next part of this series, we’ll look at the importance of free cash flow among mining companies in 2015.
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Eldorado Gold Corporation
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PRODUCTEUR |
CODE : ELD.TO |
ISIN : CA2849021035 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Eldorado Gold est une société de production minière d'or basée au Canada. Eldorado Gold est productrice d'or, de fer au Bresil, au Mexique, en Chine et en Turquie, en développement de projets d'argent et d'or en Chine et en Grece, et détient divers projets d'exploration au Bresil et en Chine. Ses principaux projets en production sont KISLADAG et EFEMÇUKURU en Turquie, LA TRINIDAD - ELDORADO au Mexique, TANJIANSHAN, JINFENG, JIANCHALING, WHITE MOUNTAIN et BEYINHAR en Chine et VILA NOVA au Bresil, ses principaux projets en développement sont EASTERN DRAGON en Chine et PERAMA HILL en Grece et ses principaux projets en exploration sont HEI-SHAN (SHANDONG) et ZHANGJIASHAN en Chine et TOCANTINZINHO au Bresil. Eldorado Gold est cotée au Canada, aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 14,9 milliards CA$ (10,9 milliards US$, 10,2 milliards €). La valeur de son action a atteint son plus bas niveau récent le 03 août 2001 à 0,21 CA$, et son plus haut niveau récent le 26 avril 2024 à 20,77 CA$. Eldorado Gold possède 716 820 032 actions en circulation. |