| GXE Stock | | | CAD 0.54 0.01 1.89% |
This module uses fundamental data of Gear Energy to approximate the value of its Beneish M Score. Gear Energy M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out
Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in Gear Energy. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as
signals in board of governors.
At this time, Gear Energy's
Long Term Debt is very stable compared to the past year. As of the 2nd of December 2024,
Net Debt To EBITDA is likely to grow to 0.33, while
Short and Long Term Debt Total is likely to drop about 20.1
M. At this time, Gear Energy's
Capex To Depreciation is very stable compared to the past year. As of the 2nd of December 2024,
PB Ratio is likely to grow to 1.03, while
Stock Based Compensation To Revenue is likely to drop 0.01.
At this time, Gear Energy's M Score is inapplicable. The earnings manipulation may begin if Gear Energy's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Gear Energy executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Gear Energy's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.2
Beneish M Score - Inapplicable
| Elasticity of Receivables | |
| Financial Leverage Condition | |
Gear Energy Beneish M-Score Indicator Trends
The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Gear Energy's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Gear Energy Beneish M-Score Driver Matrix
One of the toughest challenges investors face today is learning how to quickly synthesize historical
financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Gear Energy's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Gear Energy in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Gear Energy's degree of accounting gimmicks and manipulations.
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About Gear Energy Beneish M Score
M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled
The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed
financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.
Gear Energy Earnings Manipulation Drivers
Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Gear Energy. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
About Gear Energy Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Gear Energy's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Gear Energy using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at
the intrinsic value of Gear Energy based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing
financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our
fundamental analysis page.
Pair Trading with Gear Energy
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Gear Energy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gear Energy will appreciate offsetting losses from the drop in the long position's value.
The ability to find closely correlated positions to Gear Energy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Gear Energy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Gear Energy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Gear Energy to buy it.
The correlation of Gear Energy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Gear Energy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Gear Energy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Gear Energy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Other Information on Investing in Gear Stock
Gear Energy financial ratios help investors to determine whether Gear Stock is cheap or expensive when compared to a particular measure, such as profits or
enterprise value. In other words, they help investors to determine the cost of investment in Gear with respect to the benefits of owning Gear Energy security.