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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.54 (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 -3.54 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.62   Max: 12.87
Current: -3.54

-4.62
12.87

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.87. The lowest was -4.62. And the median was -2.43.


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 * 0.6599+0.528 * 1.2008+0.404 * 0.8022+0.892 * 0.8811+0.115 * 0.8672
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9307+4.679 * -0.1371-0.327 * 1.0549
=-3.54

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $207 Mil.
Revenue was 1018 + 1079 + 1283 + 1325 = $4,705 Mil.
Gross Profit was 188 + 209 + 223 + 273 = $893 Mil.
Total Current Assets was $2,400 Mil.
Total Assets was $8,817 Mil.
Property, Plant and Equipment(Net PPE) was $4,453 Mil.
Depreciation, Depletion and Amortization(DDA) was $787 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $872 Mil.
Long-Term Debt was $3,651 Mil.
Net Income was -142 + -1 + -58 + 41 = $-160 Mil.
Non Operating Income was -13 + -26 + 72 + 36 = $69 Mil.
Cash Flow from Operations was 323 + 190 + 106 + 361 = $980 Mil.
Accounts Receivable was $356 Mil.
Revenue was 1246 + 1308 + 1446 + 1340 = $5,340 Mil.
Gross Profit was 241 + 296 + 404 + 276 = $1,217 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 $742 Mil.
Selling, General & Admin. Expense(SGA) was $150 Mil.
Total Current Liabilities was $1,050 Mil.
Long-Term Debt was $3,619 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)
=(207 / 4705) / (356 / 5340)
=0.04399575 / 0.06666667
=0.6599

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)
=(209 / 5340) / (188 / 4705)
=0.22790262 / 0.18979809
=1.2008

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 - (2400 + 4453) / 8817) / (1 - (1980 + 4955) / 9601)
=0.2227515 / 0.27767941
=0.8022

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
=4705 / 5340
=0.8811

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))
=(742 / (742 + 4955)) / (787 / (787 + 4453))
=0.13024399 / 0.15019084
=0.8672

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 / 4705) / (150 / 5340)
=0.0261424 / 0.02808989
=0.9307

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)
=((3651 + 872) / 8817) / ((3619 + 1050) / 9601)
=0.51298628 / 0.48630351
=1.0549

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
=(-160 - 69 - 980) / 8817
=-0.1371

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 -3.54 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98410.38690.70660.97991.08850.86215.43231.12090.88020.8685
GMI 0.45740.82071.04040.98061.02730.8020.92231.1471.71971.2967
AQI 2.08930.48910.97650.69542.34780.68240.9991.1781.45011.0726
SGI 0.98571.09261.20811.13721.06011.36621.22950.96780.86980.936
DEPI 0.55261.05141.14330.88410.97981.0530.89451.16120.6511.0229
SGAI 0.85771.67310.98840.98330.69821.70351.05041.00670.46970.6485
LVGI 1.32621.0331.24670.88771.05240.71980.91041.1631.36940.9749
TATA -0.0379-0.0845-0.05710.03040.0211-0.0138-0.1269-0.0864-0.3763-0.1304
M-score -2.66-3.78-2.88-2.34-1.65-2.601.18-2.69-3.97-3.01

Anglogold Ashanti Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.69631.05240.62910.86524.55588.93336.14080.88050.76270.6599
GMI 1.3151.61991.58971.44261.3241.11410.92641.29061.25281.2008
AQI 1.15221.01631.35661.45011.12491.21561.24191.07260.94370.8022
SGI 0.88430.83390.80250.88490.89690.92680.97710.92330.90750.8811
DEPI 1.07080.85010.74550.68060.78771.03270.91851.02510.94380.8672
SGAI 1.03590.72513.07990.79320.78730.88930.51560.64790.71480.9307
LVGI 1.23961.50251.36171.36941.37831.08881.06870.97491.00241.0549
TATA -0.0865-0.3263-0.3357-0.3663-0.3667-0.1538-0.1568-0.1232-0.1178-0.1371
M-score -2.20-3.91-4.62-4.13-0.914.171.61-2.98-3.18-3.54
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