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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-2.99 (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 -2.99 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -4.13   Max: 12.97
Current: -2.99

-4.13
12.97

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.97. The lowest was -4.13. And the median was -2.66.


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 * 0.8661+0.528 * 1.2983+0.404 * 1.0726+0.892 * 0.9387+0.115 * 1.024
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5984+4.679 * -0.1275-0.327 * 0.9749
=-2.99

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $239 Mil.
Revenue was 1283 + 1325 + 1316 + 1324 = $5,248 Mil.
Gross Profit was 223 + 273 + 252 + 296 = $1,044 Mil.
Total Current Assets was $1,649 Mil.
Total Assets was $9,134 Mil.
Property, Plant and Equipment(Net PPE) was $4,863 Mil.
Depreciation, Depletion and Amortization(DDA) was $786 Mil.
Selling, General & Admin. Expense(SGA) was $123 Mil.
Total Current Liabilities was $984 Mil.
Long-Term Debt was $3,498 Mil.
Net Income was -58 + 41 + -80 + 39 = $-58 Mil.
Non Operating Income was 72 + 36 + -124 + -64 = $-80 Mil.
Cash Flow from Operations was 106 + 361 + 370 + 350 = $1,187 Mil.
Accounts Receivable was $294 Mil.
Revenue was 1446 + 1340 + 1342 + 1463 = $5,591 Mil.
Gross Profit was 404 + 276 + 330 + 434 = $1,444 Mil.
Total Current Assets was $2,270 Mil.
Total Assets was $9,674 Mil.
Property, Plant and Equipment(Net PPE) was $4,815 Mil.
Depreciation, Depletion and Amortization(DDA) was $800 Mil.
Selling, General & Admin. Expense(SGA) was $219 Mil.
Total Current Liabilities was $1,236 Mil.
Long-Term Debt was $3,633 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)
=(239 / 5248) / (294 / 5591)
=0.04554116 / 0.05258451
=0.8661

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)
=(273 / 5591) / (223 / 5248)
=0.25827222 / 0.19893293
=1.2983

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 - (1649 + 4863) / 9134) / (1 - (2270 + 4815) / 9674)
=0.28705934 / 0.26762456
=1.0726

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
=5248 / 5591
=0.9387

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))
=(800 / (800 + 4815)) / (786 / (786 + 4863))
=0.14247551 / 0.13913967
=1.024

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 / 5248) / (219 / 5591)
=0.0234375 / 0.03917009
=0.5984

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)
=((3498 + 984) / 9134) / ((3633 + 1236) / 9674)
=0.49069411 / 0.50330784
=0.9749

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
=(-58 - -80 - 1187) / 9134
=-0.1275

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 -2.99 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.58571.12781.69631.05240.62910.86524.54248.79176.04320.8661
GMI 1.55751.09381.3151.61991.58971.44261.32791.12190.93291.2983
AQI 1.06571.1781.15221.01631.35661.45011.12491.21561.24191.0726
SGI 1.06580.96180.88430.83390.80250.88490.89950.94170.99280.9387
DEPI 1.13221.15691.07080.85010.74550.68060.78771.03150.91741.024
SGAI 0.16911.16691.03590.72513.07990.79320.75950.82850.47670.5984
LVGI 1.35211.1631.23961.50251.36171.36941.37831.08881.06870.9749
TATA -0.0805-0.0954-0.0865-0.3263-0.3357-0.3663-0.3667-0.158-0.1611-0.1275
M-score -2.82-2.79-2.20-3.91-4.62-4.13-0.914.051.52-2.99
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