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Anglogold Ashanti Ltd (NYSE:AU)
Beneish M-Score
-4.16 (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 -4.16 suggests that the company is not a manipulator.

AU' s 10-Year Beneish M-Score Range
Min: -3.96   Max: 1.83
Current: -4.16

-3.96
1.83

During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 1.83. The lowest was -3.96. 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 * 0.8834+0.528 * 1.4416+0.404 * 1.4501+0.892 * 0.8849+0.115 * 0.6813
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7805+4.679 * -0.3763-0.327 * 1.3694
=-4.16

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $369 Mil.
Revenue was 1456 + 1398 + 1263 + 1474 = $5,591 Mil.
Gross Profit was 82 + 405 + 396 + 562 = $1,445 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 $799 Mil.
Selling, General & Admin. Expense(SGA) was $201 Mil.
Total Current Liabilities was $1,236 Mil.
Long-Term Debt was $3,633 Mil.
Net Income was -367 + 10 + -2085 + 212 = $-2,230 Mil.
Non Operating Income was 184 + -362 + 212 + 130 = $164 Mil.
Cash Flow from Operations was 690 + 225 + 39 + 292 = $1,246 Mil.
Accounts Receivable was $472 Mil.
Revenue was 1305 + 1652 + 1641 + 1720 = $6,318 Mil.
Gross Profit was 111 + 588 + 795 + 860 = $2,354 Mil.
Total Current Assets was $2,612 Mil.
Total Assets was $12,739 Mil.
Property, Plant and Equipment(Net PPE) was $7,776 Mil.
Depreciation, Depletion and Amortization(DDA) was $835 Mil.
Selling, General & Admin. Expense(SGA) was $291 Mil.
Total Current Liabilities was $1,958 Mil.
Long-Term Debt was $2,724 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)
=(369 / 5591) / (472 / 6318)
=0.06599893 / 0.07470719
=0.8834

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)
=(405 / 6318) / (82 / 5591)
=0.37258626 / 0.25845108
=1.4416

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 - (2270 + 4815) / 9674) / (1 - (2612 + 7776) / 12739)
=0.26762456 / 0.18455138
=1.4501

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
=5591 / 6318
=0.8849

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))
=(835 / (835 + 7776)) / (799 / (799 + 4815))
=0.09696899 / 0.14232276
=0.6813

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)
=(201 / 5591) / (291 / 6318)
=0.03595063 / 0.04605888
=0.7805

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)
=((3633 + 1236) / 9674) / ((2724 + 1958) / 12739)
=0.50330784 / 0.36753277
=1.3694

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
=(-2230 - 164 - 1246) / 9674
=-0.3763

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 -4.16 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 1.01061.16130.77591.03841.03850.92010.84721.15381.09381.4416
AQI 1.15592.08930.9490.50330.69542.34780.68240.9991.1781.4501
SGI 1.2881.15531.09261.141.20521.06011.36621.2160.96180.8849
DEPI 1.05410.59410.85681.4030.88410.97981.0530.85781.15690.6813
SGAI 0.91411.10271.67311.11460.57241.58911.14020.58471.08830.7805
LVGI 0.83981.32621.0331.24670.88771.05240.71980.91041.1631.3694
TATA -0.0302-0.0379-0.0845-0.1279-0.04050.0182-0.0138-0.1384-0.1022-0.3763
M-score -2.27-2.13-3.84-3.07-2.58-2.08-2.30-2.79-2.57-4.16

Anglogold Ashanti Ltd Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.98760.97691.02981.31611.86991.38631.31421.28071.02020.8834
GMI 0.88731.15381.18461.26511.55751.09381.21081.35361.23911.4416
AQI 1.05820.9990.92720.99451.06571.1781.291.43791.35661.4501
SGI 1.2381.2161.1971.14861.06580.96180.88590.8240.80110.8849
DEPI 0.89110.85780.95560.97791.13221.15691.06340.78680.75020.6813
SGAI 1.81280.58470.49430.44720.16911.08831.15791.19063.75680.7805
LVGI 0.59910.91040.86220.96591.35211.1631.23961.50251.36171.3694
TATA -0.0663-0.1384-0.1301-0.1533-0.0805-0.1022-0.0908-0.3319-0.2905-0.3763
M-score -2.65-2.79-2.69-2.53-1.63-2.57-2.59-3.79-4.35-4.16
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