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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.62 (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 -3.62 suggests that the company is not a manipulator.

AU' s Beneish M-Score Range Over the Past 10 Years
Min: -4.11   Max: 2.95
Current: -3.62

-4.11
2.95

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 2.95. The lowest was -4.11. And the median was -2.53.


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 * 0.823+0.528 * 1.1351+0.404 * 0.8972+0.892 * 0.8084+0.115 * 0.8592
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8488+4.679 * -0.1852-0.327 * 0.9356
=-3.62

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $159 Mil.
Revenue was 1020 + 945 + 1018 + 1079 = $4,062 Mil.
Gross Profit was 208 + 115 + 188 + 209 = $720 Mil.
Total Current Assets was $1,350 Mil.
Total Assets was $7,284 Mil.
Property, Plant and Equipment(Net PPE) was $4,058 Mil.
Depreciation, Depletion and Amortization(DDA) was $780 Mil.
Selling, General & Admin. Expense(SGA) was $94 Mil.
Total Current Liabilities was $707 Mil.
Long-Term Debt was $2,637 Mil.
Net Income was 130 + -72 + -142 + -1 = $-85 Mil.
Non Operating Income was 26 + 128 + -13 + -26 = $115 Mil.
Cash Flow from Operations was 375 + 261 + 323 + 190 = $1,149 Mil.
Accounts Receivable was $239 Mil.
Revenue was 1217 + 1254 + 1246 + 1308 = $5,025 Mil.
Gross Profit was 219 + 255 + 241 + 296 = $1,011 Mil.
Total Current Assets was $1,649 Mil.
Total Assets was $9,134 Mil.
Property, Plant and Equipment(Net PPE) was $4,863 Mil.
Depreciation, Depletion and Amortization(DDA) was $782 Mil.
Selling, General & Admin. Expense(SGA) was $137 Mil.
Total Current Liabilities was $984 Mil.
Long-Term Debt was $3,498 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)
=(159 / 4062) / (239 / 5025)
=0.03914328 / 0.04756219
=0.823

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)
=(115 / 5025) / (208 / 4062)
=0.20119403 / 0.17725258
=1.1351

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 - (1350 + 4058) / 7284) / (1 - (1649 + 4863) / 9134)
=0.2575508 / 0.28705934
=0.8972

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
=4062 / 5025
=0.8084

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))
=(782 / (782 + 4863)) / (780 / (780 + 4058))
=0.13852967 / 0.16122365
=0.8592

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)
=(94 / 4062) / (137 / 5025)
=0.02314131 / 0.02726368
=0.8488

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)
=((2637 + 707) / 7284) / ((3498 + 984) / 9134)
=0.45908841 / 0.49069411
=0.9356

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
=(-85 - 115 - 1149) / 7284
=-0.1852

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 -3.62 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.37740.76760.92461.08850.86215.49271.12780.92480.85640.8241
GMI 0.74471.28610.87370.92010.84721.15381.09381.48751.25241.1227
AQI 0.9490.50330.69542.34780.68240.9991.1781.53581.01280.8972
SGI 1.09261.141.20521.06011.36621.2160.96180.83350.94280.8073
DEPI 0.85681.4030.88410.97981.0530.85781.15690.69711.0030.863
SGAI 2.1160.59570.84681.58911.14020.58471.16690.89980.58020.9194
LVGI 1.0331.24670.88771.05240.71980.91041.1631.35340.98650.9356
TATA -0.0684-0.0469-0.03260.0341-0.0072-0.1384-0.0954-0.3777-0.1453-0.1991
M-score -3.66-2.80-2.66-1.80-2.451.36-2.79-4.12-3.13-3.70

Anglogold Ashanti Ltd Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.62910.92484.84559.51236.63420.84620.73760.63840.7530.823
GMI 1.45311.48861.37781.16710.97291.2441.19831.14091.26481.1351
AQI 1.35661.53581.12491.21561.24191.01280.94370.80220.89350.8972
SGI 0.80250.83350.84330.87040.90440.95420.93840.91090.86410.8084
DEPI 0.74550.69630.80681.05890.94161.00520.92450.84850.79010.8592
SGAI 3.07990.8960.90071.03530.61620.61620.67480.86360.93540.8488
LVGI 1.36171.35341.37831.08881.06870.98651.00241.05491.01770.9356
TATA -0.3406-0.374-0.3744-0.1615-0.1639-0.1384-0.1335-0.1529-0.1975-0.1852
M-score -4.71-4.11-0.714.631.97-3.10-3.27-3.62-3.67-3.62
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