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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-4.19 (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 -4.19 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.35   Max: 12.62
Current: -4.19

-4.35
12.62

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.62. The lowest was -4.35. And the median was -2.45.


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 * 0.8894+0.528 * 1.3269+0.404 * 1.4602+0.892 * 0.8995+0.115 * 0.7226
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7427+4.679 * -0.3766-0.327 * 1.3783
=-4.19

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $380 Mil.
Revenue was 1324 + 1456 + 1398 + 1274 = $5,452 Mil.
Gross Profit was 296 + 82 + 405 + 524 = $1,307 Mil.
Total Current Assets was $2,094 Mil.
Total Assets was $9,678 Mil.
Property, Plant and Equipment(Net PPE) was $4,885 Mil.
Depreciation, Depletion and Amortization(DDA) was $768 Mil.
Selling, General & Admin. Expense(SGA) was $161 Mil.
Total Current Liabilities was $1,176 Mil.
Long-Term Debt was $3,569 Mil.
Net Income was 39 + -367 + 10 + -2112 = $-2,430 Mil.
Non Operating Income was -64 + 184 + -362 + 217 = $-25 Mil.
Cash Flow from Operations was 350 + 690 + 225 + -25 = $1,240 Mil.
Accounts Receivable was $475 Mil.
Revenue was 1463 + 1305 + 1652 + 1641 = $6,061 Mil.
Gross Profit was 434 + 111 + 588 + 795 = $1,928 Mil.
Total Current Assets was $2,507 Mil.
Total Assets was $12,875 Mil.
Property, Plant and Equipment(Net PPE) was $7,909 Mil.
Depreciation, Depletion and Amortization(DDA) was $861 Mil.
Selling, General & Admin. Expense(SGA) was $241 Mil.
Total Current Liabilities was $1,710 Mil.
Long-Term Debt was $2,870 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)
=(380 / 5452) / (475 / 6061)
=0.06969919 / 0.07836991
=0.8894

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)
=(82 / 6061) / (296 / 5452)
=0.31809932 / 0.23972854
=1.3269

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 - (2094 + 4885) / 9678) / (1 - (2507 + 7909) / 12875)
=0.27887993 / 0.19099029
=1.4602

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
=5452 / 6061
=0.8995

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))
=(861 / (861 + 7909)) / (768 / (768 + 4885))
=0.0981756 / 0.13585707
=0.7226

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)
=(161 / 5452) / (241 / 6061)
=0.02953045 / 0.03976242
=0.7427

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)
=((3569 + 1176) / 9678) / ((2870 + 1710) / 12875)
=0.49028725 / 0.35572816
=1.3783

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
=(-2430 - -25 - 1240) / 9678
=-0.3766

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 -4.19 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 0.94921.03970.16571.12390.90670.86751.05880.97691.38630.8834
GMI 1.01061.16130.74471.20120.93540.92010.84721.15381.09381.4416
AQI 1.15592.08930.48910.97650.69542.34780.68240.9991.1781.4501
SGI 1.2881.15531.09261.141.20521.06011.36621.2160.96180.8849
DEPI 1.05410.59411.05141.14330.88410.97981.0530.85781.15690.6813
SGAI 0.91411.10272.1160.88130.57241.58911.14020.58471.08830.7805
LVGI 0.83981.32621.0331.24670.88771.05240.71980.91041.1631.3694
TATA -0.0302-0.0379-0.0718-0.0513-0.04050.0182-0.0138-0.1384-0.1022-0.3763
M-score -2.27-2.13-4.04-2.43-2.63-2.08-2.30-2.79-2.57-4.16

Anglogold Ashanti Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.97691.02981.31611.86991.38631.31651.28071.02020.88340.8894
GMI 1.15381.18461.26511.55751.09381.28881.35361.23911.44161.3269
AQI 0.9990.92720.99451.06571.1781.291.43791.35661.45011.4602
SGI 1.2161.1971.14861.06580.96180.88430.8240.80110.88490.8995
DEPI 0.85780.95560.97791.13221.15691.05340.78680.75020.68130.7226
SGAI 0.58470.49430.44720.16911.08831.00571.19063.75680.78050.7427
LVGI 0.91040.86220.96591.35211.1631.23961.50251.36171.36941.3783
TATA -0.1384-0.1301-0.1533-0.0805-0.1022-0.0933-0.3319-0.2905-0.3763-0.3766
M-score -2.79-2.69-2.53-1.63-2.57-2.53-3.79-4.35-4.16-4.19
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