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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-3.19 (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 -3.19 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.62   Max: 12.97
Current: -3.19

-4.62
12.97

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.97. The lowest was -4.62. And the median was -2.46.


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 * 0.752+0.528 * 1.256+0.404 * 0.9437+0.892 * 0.9203+0.115 * 0.9428
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.693+4.679 * -0.1223-0.327 * 1.0024
=-3.19

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $263 Mil.
Revenue was 1079 + 1283 + 1325 + 1316 = $5,003 Mil.
Gross Profit was 209 + 223 + 273 + 252 = $957 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 $776 Mil.
Selling, General & Admin. Expense(SGA) was $118 Mil.
Total Current Liabilities was $880 Mil.
Long-Term Debt was $3,471 Mil.
Net Income was -1 + -58 + 41 + -80 = $-98 Mil.
Non Operating Income was -26 + 72 + 36 + -124 = $-42 Mil.
Cash Flow from Operations was 190 + 106 + 361 + 370 = $1,027 Mil.
Accounts Receivable was $380 Mil.
Revenue was 1308 + 1446 + 1340 + 1342 = $5,436 Mil.
Gross Profit was 296 + 404 + 276 + 330 = $1,306 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 $769 Mil.
Selling, General & Admin. Expense(SGA) was $185 Mil.
Total Current Liabilities was $1,176 Mil.
Long-Term Debt was $3,569 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)
=(263 / 5003) / (380 / 5436)
=0.05256846 / 0.06990434
=0.752

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)
=(223 / 5436) / (209 / 5003)
=0.24025018 / 0.19128523
=1.256

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 - (1920 + 4603) / 8853) / (1 - (2094 + 4885) / 9678)
=0.26318762 / 0.27887993
=0.9437

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
=5003 / 5436
=0.9203

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))
=(769 / (769 + 4885)) / (776 / (776 + 4603))
=0.1360099 / 0.14426473
=0.9428

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)
=(118 / 5003) / (185 / 5436)
=0.02358585 / 0.03403238
=0.693

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)
=((3471 + 880) / 8853) / ((3569 + 1176) / 9678)
=0.49147182 / 0.49028725
=1.0024

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
=(-98 - -42 - 1027) / 8853
=-0.1223

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 -3.19 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.83960.38690.74880.92461.08850.86215.49271.12780.86520.8685
GMI 1.16130.74471.20120.93540.92010.84721.15381.09381.44161.2967
AQI 2.08930.48910.97650.69542.34780.68240.9991.1781.45011.0726
SGI 1.15531.09261.141.20521.06011.36621.2160.96180.88490.936
DEPI 0.59411.05141.14330.88410.97981.0530.85781.15690.68131.0229
SGAI 1.10272.1160.88130.57241.58911.14020.58471.16690.79680.5925
LVGI 1.32621.0331.24670.88771.05240.71980.91041.1631.36940.9749
TATA -0.0379-0.0718-0.0513-0.04050.0182-0.0138-0.1384-0.0954-0.3694-0.1304
M-score -2.31-3.84-2.77-2.62-1.88-2.481.36-2.79-4.14-3.00

Anglogold Ashanti Ltd Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.12781.69631.05240.62910.86524.55588.81776.06120.86870.752
GMI 1.09381.3151.61991.58971.44261.3241.11860.93011.29431.256
AQI 1.1781.15221.01631.35661.45011.12491.21561.24191.07260.9437
SGI 0.96180.88430.83390.80250.88490.89690.93890.98990.93580.9203
DEPI 1.15691.07080.85010.74550.68060.78771.03150.91741.0240.9428
SGAI 1.16691.03590.72513.07990.79320.78730.86610.50120.62950.693
LVGI 1.1631.23961.50251.36171.36941.37831.08881.06870.97491.0024
TATA -0.0954-0.0865-0.3263-0.3357-0.3663-0.3667-0.158-0.1611-0.1275-0.1223
M-score -2.79-2.20-3.91-4.62-4.13-0.914.071.53-3.00-3.19
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