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Beneish M-Score 1.49 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of Anglogold Ashanti Ltd was 12.97. The lowest was -4.61. And the median was -2.43.
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 * 6.0432||+||0.528 * 0.9329||+||0.404 * 1.2419||+||0.892 * 0.9928||+||0.115 * 0.9174|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.4388||+||4.679 * -0.1682||-||0.327 * 1.0687|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $312 Mil.|
Revenue was 1325 + 1316 + 1324 + 1446 = $5,411 Mil.
Gross Profit was 273 + 252 + 296 + 404 = $1,225 Mil.
Total Current Assets was $1,843 Mil.
Total Assets was $9,310 Mil.
Property, Plant and Equipment(Net PPE) was $4,839 Mil.
Depreciation, Depletion and Amortization(DDA) was $775 Mil.
Selling, General & Admin. Expense(SGA) was $105 Mil.
Total Current Liabilities was $1,005 Mil.
Long-Term Debt was $3,521 Mil.
Net Income was 41 + -80 + 39 + -305 = $-305 Mil.
Non Operating Income was 36 + -124 + -64 + 38 = $-114 Mil.
Cash Flow from Operations was 361 + 370 + 350 + 294 = $1,375 Mil.
|Accounts Receivable was $52 Mil.
Revenue was 1340 + 1342 + 1463 + 1305 = $5,450 Mil.
Gross Profit was 276 + 330 + 434 + 111 = $1,151 Mil.
Total Current Assets was $2,564 Mil.
Total Assets was $10,770 Mil.
Property, Plant and Equipment(Net PPE) was $5,758 Mil.
Depreciation, Depletion and Amortization(DDA) was $835 Mil.
Selling, General & Admin. Expense(SGA) was $241 Mil.
Total Current Liabilities was $1,296 Mil.
Long-Term Debt was $3,603 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)|
|=||(312 / 5411)||/||(52 / 5450)|
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)|
|=||(252 / 5450)||/||(273 / 5411)|
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 - (1843 + 4839) / 9310)||/||(1 - (2564 + 5758) / 10770)|
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))|
|=||(835 / (835 + 5758))||/||(775 / (775 + 4839))|
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)|
|=||(105 / 5411)||/||(241 / 5450)|
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)|
|=||((3521 + 1005) / 9310)||/||((3603 + 1296) / 10770)|
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|
|=||(-305 - -114||-||1375)||/||9310|
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 1.49 signals that the company is likely to 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