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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 -4.16 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(405 / 6318)||/||(82 / 5591)|
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 - (2270 + 4815) / 9674)||/||(1 - (2612 + 7776) / 12739)|
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 + 7776))||/||(799 / (799 + 4815))|
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)|
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)|
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|
|=||(-2230 - 164||-||1246)||/||9674|
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.
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