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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.32 (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.

Anglogold Ashanti Ltd has a M-score of -3.32 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.32   Max: 1.77
Current: -3.32

-4.32
1.77

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 1.77. The lowest was -4.32. And the median was -2.40.


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 Anglogold Ashanti Ltd 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 * 0.7925+0.528 * 1.1219+0.404 * 1.2156+0.892 * 0.9417+0.115 * 1.0315
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8113+4.679 * -0.161-0.327 * 1.0888
=-3.32

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $356 Mil.
Revenue was 1316 + 1324 + 1456 + 1330 = $5,426 Mil.
Gross Profit was 252 + 296 + 82 + 598 = $1,228 Mil.
Total Current Assets was $1,980 Mil.
Total Assets was $9,601 Mil.
Property, Plant and Equipment(Net PPE) was $4,955 Mil.
Depreciation, Depletion and Amortization(DDA) was $743 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $1,050 Mil.
Long-Term Debt was $3,619 Mil.
Net Income was -80 + 39 + -367 + 63 = $-345 Mil.
Non Operating Income was -124 + -64 + 184 + -156 = $-160 Mil.
Cash Flow from Operations was 370 + 350 + 690 + -49 = $1,361 Mil.
Accounts Receivable was $477 Mil.
Revenue was 1342 + 1463 + 1305 + 1652 = $5,762 Mil.
Gross Profit was 330 + 434 + 111 + 588 = $1,463 Mil.
Total Current Assets was $2,197 Mil.
Total Assets was $10,178 Mil.
Property, Plant and Equipment(Net PPE) was $5,656 Mil.
Depreciation, Depletion and Amortization(DDA) was $879 Mil.
Selling, General & Admin. Expense(SGA) was $161 Mil.
Total Current Liabilities was $2,313 Mil.
Long-Term Debt was $2,233 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)
=(356 / 5426) / (477 / 5762)
=0.06561003 / 0.08278376
=0.7925

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)
=(296 / 5762) / (252 / 5426)
=0.25390489 / 0.22631773
=1.1219

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 - (1980 + 4955) / 9601) / (1 - (2197 + 5656) / 10178)
=0.27767941 / 0.22843388
=1.2156

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
=5426 / 5762
=0.9417

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))
=(879 / (879 + 5656)) / (743 / (743 + 4955))
=0.1345065 / 0.13039663
=1.0315

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)
=(123 / 5426) / (161 / 5762)
=0.02266863 / 0.02794169
=0.8113

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)
=((3619 + 1050) / 9601) / ((2233 + 2313) / 10178)
=0.48630351 / 0.44664964
=1.0888

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
=(-345 - -160 - 1361) / 9601
=-0.161

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.

Anglogold Ashanti Ltd has a M-score of -3.32 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.

Anglogold Ashanti Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.41982.90230.16571.06050.96090.86751.05880.97691.38630.8834
GMI 2.66750.45740.82071.04040.98061.02730.8021.15381.09381.4416
AQI 0.78271.46861.03171.83210.37071.50071.06770.9991.1781.4501
SGI 1.22260.98571.09261.20811.13721.06011.36621.2160.96180.8849
DEPI 1.2860.77650.84030.94721.06711.1140.92620.85781.15690.6813
SGAI 0.69750.85771.67310.98840.98330.69821.70350.58471.08830.7805
LVGI 0.90631.22821.0331.24670.8851.05560.71980.91041.1631.3694
TATA -0.0333-0.0379-0.0845-0.05710.03040.0211-0.0138-0.1384-0.1022-0.3763
M-score -2.06-1.09-3.79-2.23-2.47-2.19-2.28-2.79-2.57-4.16

Anglogold Ashanti Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.02981.31611.86991.38631.31651.26561.02020.88340.88940.7925
GMI 1.1541.16321.55751.09381.3151.61991.23991.44261.32791.1219
AQI 0.89971.40711.06571.1781.15221.01631.35661.45011.12491.2156
SGI 1.1971.14861.06580.96180.88430.83390.80110.88490.89950.9417
DEPI 0.96860.88361.13221.15691.07080.85010.74940.68060.78771.0315
SGAI 0.5310.52940.16911.08830.95290.64153.7450.77670.73810.8113
LVGI 0.86220.96591.35211.1631.23961.50251.36171.36941.37831.0888
TATA -0.1301-0.1175-0.0805-0.1022-0.0933-0.3348-0.2843-0.3693-0.3697-0.161
M-score -2.72-2.28-1.63-2.57-2.56-3.74-4.32-4.12-4.28-3.32
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