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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(296 / 5762)||/||(252 / 5426)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-345 - -160||-||1361)||/||9601|
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.
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
Anglogold Ashanti Ltd Annual Data
Anglogold Ashanti Ltd Quarterly Data