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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.04 (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 -3.30 suggests that the company is not a manipulator.

AU' s Beneish M-Score Range Over the Past 10 Years
Min: -4.55   Max: 7.16
Current: -3.04

-4.55
7.16

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 7.16. The lowest was -4.55. And the median was -2.57.


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 * 1.1156+0.528 * 1.0325+0.404 * 0.9993+0.892 * 0.818+0.115 * 0.9183
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.718+4.679 * -0.1828-0.327 * 0.8836
=-3.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $240 Mil.
Revenue was 933 + 1027 + 945 + 1018 = $3,923 Mil.
Gross Profit was 221 + 208 + 115 + 188 = $732 Mil.
Total Current Assets was $1,406 Mil.
Total Assets was $7,433 Mil.
Property, Plant and Equipment(Net PPE) was $4,072 Mil.
Depreciation, Depletion and Amortization(DDA) was $755 Mil.
Selling, General & Admin. Expense(SGA) was $74 Mil.
Total Current Liabilities was $1,182 Mil.
Long-Term Debt was $2,046 Mil.
Net Income was -78 + 130 + -72 + -142 = $-162 Mil.
Non Operating Income was -126 + 26 + 128 + -13 = $15 Mil.
Cash Flow from Operations was 223 + 375 + 261 + 323 = $1,182 Mil.
Accounts Receivable was $263 Mil.
Revenue was 1079 + 1217 + 1254 + 1246 = $4,796 Mil.
Gross Profit was 209 + 219 + 255 + 241 = $924 Mil.
Total Current Assets was $1,920 Mil.
Total Assets was $8,853 Mil.
Property, Plant and Equipment(Net PPE) was $4,603 Mil.
Depreciation, Depletion and Amortization(DDA) was $772 Mil.
Selling, General & Admin. Expense(SGA) was $126 Mil.
Total Current Liabilities was $880 Mil.
Long-Term Debt was $3,471 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)
=(240 / 3923) / (263 / 4796)
=0.06117767 / 0.05483736
=1.1156

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)
=(924 / 4796) / (732 / 3923)
=0.19266055 / 0.18659189
=1.0325

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 - (1406 + 4072) / 7433) / (1 - (1920 + 4603) / 8853)
=0.26301628 / 0.26318762
=0.9993

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
=3923 / 4796
=0.818

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))
=(772 / (772 + 4603)) / (755 / (755 + 4072))
=0.14362791 / 0.15641185
=0.9183

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)
=(74 / 3923) / (126 / 4796)
=0.01886311 / 0.02627189
=0.718

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)
=((2046 + 1182) / 7433) / ((3471 + 880) / 8853)
=0.43427956 / 0.49147182
=0.8836

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
=(-162 - 15 - 1182) / 7433
=-0.1828

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 -3.30 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 local exchange's currency.

Anglogold Ashanti Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.37740.76760.92461.08850.86214.25141.45710.92480.85640.8227
GMI 0.74471.28610.87370.92010.84721.15381.09381.48751.25241.1246
AQI 0.9490.50330.69542.34780.68240.9991.1781.53581.01280.8972
SGI 1.09261.141.20521.06011.36621.2160.96180.83350.94280.8087
DEPI 0.85681.4030.88410.97981.0530.85781.15690.69711.0030.863
SGAI 2.1160.59570.84681.58911.14020.58471.16690.89980.58020.9178
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 -3.66-2.80-2.66-1.80-2.450.22-2.48-4.12-3.13-3.70

Anglogold Ashanti Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Jun16
DSRI 0.92484.84559.51236.63420.84620.73760.63840.7530.82161.1156
GMI 1.48861.37781.16710.97291.2441.19831.14091.26481.1371.0325
AQI 1.53581.12491.21561.24191.01280.94370.80220.89350.89720.9993
SGI 0.83350.84330.87040.90440.95420.93840.91090.86410.80980.818
DEPI 0.69630.80681.05890.94161.00520.92450.84850.79010.85920.9183
SGAI 0.8960.90071.03530.61620.61620.67480.86360.93540.84730.718
LVGI 1.35341.37831.08881.06870.98651.00241.05491.01770.93560.8836
TATA -0.374-0.3744-0.1615-0.1639-0.1384-0.1335-0.1529-0.1975-0.1852-0.1828
M-score -4.11-0.714.631.97-3.10-3.27-3.62-3.67-3.62-3.30
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